UK recruiters blame Brexit as staff shortage worsens

British recruiters are struggling to fill jobs from the financial services sector to transport. [BasPhoto/Shutterstock]

A shortage of staff for British employers worsened in July, hurt by the departure of European Union workers after last year’s Brexit vote, a group representing recruitment agencies said on Tuesday (8 August).

The Recruitment and Employment Confederation (REC) said the availability of staff overall suffered its biggest fall last month in a year and a half.

“The parts of the economy most reliant on European workers are under even more pressure as many EU workers return home,” REC Chief Executive Kevin Green said.

“Employers are not just struggling to hire the brightest and best, but also people to fill roles such as chefs, drivers and warehouse workers.”

UK spokesman: We do not recognise reported €40 billion Brexit bill

Britain does not recognise media reports that the government is willing to pay €40 billion to exit the European Union, Prime Minister Theresa May’s spokesman said on Monday (7 August).

London in particular was feeling the strain, with hiring growing at a slower pace than anywhere else in Britain.

“Financial services, a crucial part of the London labour market, are not hiring in their usual quantity as the uncertainty caused by Brexit makes them hesitant,” Green said.

Strong trade surplus offers hope for UK services industry post-Brexit

Brexit will take a heavy toll on the UK’s trade in services with the EU but its trade surplus with the rest of the world will cushion the blow if the government can sign new trade deals quickly, experts say.

The increase in demand for staff matched a roughly two-year high in May and pushed up starting salaries for permanent staff at the sharpest pace in 20 months. Hourly pay for short-term staff also increased.

However, previous increases in pay as measured by REC have not translated into big rises in broader measures of wage growth, something the Bank of England is watching closely as it considers when to raise interest rates from record lows.

According to official data, pay including bonuses, when adjusted for inflation, fell by 0.7 percent in the three months to May compared with a year earlier, its sharpest drop since mid-2014.

James McGroy, executive director of Open Britain, a group which lobbied for Britain to stay in the EU and now wants a close relationship with the bloc, said the government needed to make clear that EU citizens were still welcome.

“They should start by dropping their damaging and unachievable target of cutting net migration to the tens of thousands,” he said.

Brexit GDP losses to dwarf Britain's EU budget contributions

As net contributors to the EU budget, the UK’s Brexiteers had hoped they would be better off after leaving the bloc. But the evidence suggests Britain stands to lose more through reduced market access than it could hope to claw back from Brussels.

UK imports and exports will suffer from Brexit isolation

The United Kingdom is a net importer of goods, both from the EU and the rest of the world. While post-Brexit Britain will remain an important export market for the EU-27, its isolation in Europe and loss of preferential access to the bloc’s trading partners could have dramatic consequences.