UK salaries weaken in aftermath of Brexit vote

UK job seekers are starting to see the impact of Brexit, with salaries under pressure and companies advertising more contract positions as they resist committing to permanent hiring.

The average advertised salary was £32,688 in July, down 2.4 per cent from a year earlier, according to an index by job search engine Adzuna published Tuesday. When inflation is taken into account real earnings have fallen 3 per cent, it said.

While the Bank of England expects continued wage growth, the weaker pound may push up inflation, eating into real incomes.

Adzuna said Brexit has played a role in the “widespread stagnation” in salaries as industries such as finance with higher-paid workers delay hiring and “wait for political and economic decisions to become clearer”.

Labour market

The labour market remained relatively stable before the EU referendum, though there were some signs of weakness at the end of the second quarter. Companies added 172,000 jobs in the three months and the unemployment rate stayed at 4.9 per cent.

“The resilience of the jobs market can’t be forgotten,” said Doug Monro, co-founder of Adzuna. “The unemployment rate has fallen to levels not seen since 2005, and this is hugely encouraging.”

The report showed the number of advertised positions rose 2.4 per cent in July from a year earlier, though part-time vacancies dropped 58 per cent. – Bloomberg