UK labour market: still waiting for Brexit effect - HL comment
Ben Brettell, Senior Economist, Hargreaves Lansdown:
The UK’s labour market proved resilient in the immediate aftermath of the vote to leave the EU, ONS data has shown. This is the latest piece of evidence which shows the economy has fared better than expected since June’s referendum.
In the three months to July, unemployment fell by 39,000, leaving the rate unchanged at 4.9%, while wage growth fell slightly, showing the expected increase in inflation hasn’t yet fed through to higher pay. The claimant count, or number of people claiming out-of-work benefits, rose, but by a relatively negligible 2,400. In a quirk of the data, the claimant count figure is for August, rather than July, and this lends it an extra significance.
The picture will gradually become clear over the next few months. A Manpower Group survey released yesterday showed that employers’ hiring intentions were on the wane in the key financial and business services, construction and utilities sectors. However, these was balanced by more positive news from other areas of the economy.
The post-referendum landscape has been characterised by surveys forecasting a sharp weakening of activity, which have thus far failed to appear in the hard data. I suspect that the majority of businesses and consumers have concluded that except for the weaker pound, not much has changed since 23 June, and it’s largely business as usual – for now at least.
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