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UK businesses are hiring at a lower rate than before the June referendum and wage growth is set to slow, according to the Chartered Institute of Personnel Development (CIPD).
The Institute has said that British businesses were beginning to exhibit anxieties as a result of ongoing Brexit negotiations. The survey revealed that although more individuals were set to be employed than cut for the final quarter, net employment balance level had fallen to +22 according to latest figures from +27 in the quarter previously.
In addition, the CIPD anticipated that wages in real terms were also set to experience a slowdown in growth. Amidst rising levels of inflation levels, employers were forecast to make adjustments of a mere 1.1 percent.
Gerwyn Davies, a labour market analyst for the CIPD, commented: “The report points to the UK economy beginning to face some likely headwinds following the UK’s decision to leave the European Union,”
“Pay expectations are already weak, and as inflation moves up we can expect a period of low or negative real wage growth for the squeezed middle.”
In the month of September, annual inflation rose by 1.1 percent, and analysts have predicted levels to increase to 3.0 percent in the following year.
The CIPD report additionally revealed that businesses were increasingly concerned about their ability to hire EU talent, with just 6 percent favouring a ‘Hard Brexit’ as negotiations are yet to play out.
“For years, the UK has been one of the most attractive countries for EU workers, benefiting from easy access to a large, European talent pool,” said John L. Marshall, thechief executive of Adecco Group which contributed to the report.
Thus far, the UK economy has somewhat withstood pressure from Brexit negotiations, however many economists have suggested that the full repercussions of the decision will emerge in the following year as the government begins to clarify what the Brexit process truly entails.
Prime Minister Theresa May is set to deliver a speech at Mansion House in the city of London later on today. Mrs May is expected to emphasise her government’s commitment to stimulating the UK economy. Advance extracts of the speech released by her office quoted:
“The government I lead is unequivocally and unashamedly pro-business … We will do everything we can to make the UK outside the EU the most attractive place for businesses to invest and grow…”