'Business as usual' in the labour market as any impact from Brexit will take time to materialise - EY ITEM Club comments

14 September 2016

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  • ‘Business as usual’ in the labour market…
  • …with a further rise in employment accompanied by a fall in unemployment and more evidence of subdued wage growth
  • But any impact from Brexit vote will take time to materialise 

Martin Beck, senior economic advisor to the EY ITEM Club, comments:

“So far, the little evidence we have for the post-referendum period suggests that the vote to leave the EU has had little effect on the labour market. The familiar pattern of rising employment and falling unemployment continued in the three months to July and although the claimant count has edged up in August, it remained below the June level. In addition, the number of job vacancies nudged up to a five-month high in the June to August period.

“An equally familiar, though less desirable, result was a slowing in the headline rate of earnings growth, from 2.5% in June to 2.3% in July. The introduction of the National Living Wage earlier this year seems to have had little tangible effect on pay so far.

“But these are pretty small changes in the general scheme of things and the labour market tends to react to developments in the wider economy, rather than lead them. So it is not surprising that there is scant evidence of any Brexit impact so far.”