Ashton Whiteley: British Companies to Offer Higher Pay

Ashton Whiteley: As EU workers leave the UK in anticipation of Brexit, UK companies will be forced to offer higher wages

British companies are feeling the pressure to increase their salary offers as recruitment becomes more difficult. Economists at Ashton Whiteley say there has been a drop in the number of EU workers since the Brexit referendum last year.

More robust wage growth would help to alleviate a growing problem for the U.K.’s economy and could give the Bank of England further reason to hike interest rates even further after last week when Bank’s benchmark rate was increased for the first time in over a decade.

According to a survey by the Recruitment and Employment Confederation, wages increased last month at their second-quickest pace since November of 2015.

Ashton Whiteley economists stated that many EU workers are choosing to leave Britain because of the uncertainties facing the British economy as Brexit negotiations unfold.

There is a need for clarity regarding the future of immigration policies and systems. Without such clarity, U.K. employers will face even greater recruitment issues and employee shortages.

On Wednesday, the Bank of England said that difficulties in finding staff had increased and were beyond the standard scope of activities.

Last week, the BoE forecast an average salary growth of approximately three percent in 2018, a one percent increase from this year’s wage growth.

In August, Britain’s official statistics agency reported that migration plunged to its lowest level since 2014, with more than 50 percent of the drop caused by EU nationals leaving in the aftermath of 2016’s EU referendum.

When the Bank of England increased interest rates for the first time since 2007, one of the reasons given was that the central bank anticipates the drop in joblessness in Britain will soon begin to fuel wage growth.

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Source: Ashton Whiteley