What will Brexit mean for UK jobs?

What will Brexit mean for UK jons | The New European - Credit: Archant

The biggest issue facing UK jobs in the wake of the Brexit vote is the weakened pound and inflation.

If the picture some on the Leave side painted of modern Britain were to be believed you could be mistaken for thinking that unemployment had reached record highs due to immigrants taking advantage of the benefits system and British nationals being unable to find work.

This would be false.

The current rate of unemployment sits at around 5% – 1% lower than the United States and more than 5% lower than France.

However it is true that Britain has for some years been hit with worryingly low productivity rates and stagnation in wage growth.

The biggest issue facing UK jobs in the wake of the Brexit vote is the weakened pound and inflation. That hike in inflation means that imports will become more expensive and, unless employers start to offer better pay increases, living standards will begin to decrease alongside real wage growth.

A poorly performing economy is likely to slow the number of people looking to come to the UK to work even before any new border controls are put in place. This could lead to companies who rely on EU workers being hit whatever the outcome of the Brexit negotiations.

There is also a very real danger of big firms who are currently based in the UK moving offices, and therefore jobs, to a EU member state so they do not lose the benefits associated with their host country’s membership. Already several banks have started investigating whether or not they should consider leaving the UK.

Frankfurt has emerged as London’s biggest rival as it bids to prise financial jobs away from The City. The German banking watchdog BaFin recently hosted a meeting for as many as 50 representatives of financial firms from overseas who are exploring how they will deal with Brexit .

Some believe that in order to keep the businesses in the UK the Government will be forced to drop corporate taxes and regulations ¬– new US President Donald Trump has set out a similar economic plan for America. In a speech outlining some of her plans for Brexit plans Theresa May hinted that the EU should not punish Britain for leaving suggesting it could look to compete by becoming a tax haven.

Words: Richard Porritt