Brexit squeeze on UK firms
The Bank of England cited the loss of EU workers as it warned that British companies are facing a mounting labour shortage.
“Recruitment difficulties had broadened across skills and sectors, which was reported to be partly due to reduced availability of EU migrant workers,” business contacts told the Bank of England last month.
The comments are almost certain to fuel concerns about the effect Brexit is having on sectors such as hospitality and food manufacturing that rely heavily on EU workers. Data published this week showed the number of EU nationals working in the UK fell in the first quarter for the first time since 2010.
The loss was entirely due to a record 91,000 drop in employment among people from the eight eastern countries including Poland, Hungary, and Slovakia, that joined the EU in 2004.
The Bank of England report also provided an overview of the broader economy. It said the labour market remained buoyant despite heavy snowfall in March contributing to a “marked slowdown” in consumer spending.
Employment intentions had “ticked up” in manufacturing and economy-wide pay increases are now centered around 3% — slightly more than in 2017. Higher awards are being targeted at retaining staff with “key skills,” which reflects the concerns over availability of migrant workers.
Upward pressure on pay could be a sign that UK inflationary pressures are starting to build. Bank of England policymakers, who opted to keep interest rates unchanged last week after a sluggish first quarter, could hike in August if growth bounces back as expected.
SSP Group, which operates food and drink outlets in airports and stations, says it has seen a decline in the number of Europeans applying for jobs in the UK.
