Brexit – “Working people facing huge uncertainty" Economists warn of slowing development in UK jobs

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The UK's strong jobs marketplace is at risk of stagnating, economists have warned as unemployment remained in a record low in the latest figures.

Data from the Office for National Statistics demonstrated that the rate of unemployment was just 3.8%, the minimum level since 1974.

However, the rise in employment during the three months to May was the smallest since last August.

Some commentators warned that uncertainty in the British economy brought on by the Brexit delay was weighing on hiring.

Howard Archer, chief economic adviser to the EY Item Club, said: “Employment growth is showing increasing signs of fraying after sustaining a powerful performance at the start of the year. This has to be expected given recent soft UK business activities, extended Brexit uncertainties, an unsettled domestic political situation and a challenging global economic environment.”

Gerwyn Davies, senior labour market analyst for the CIPD, the professional body for HR and people development, said challenging times for car manufacturers and street retailers was also adding to rising redundancies.

“The jobs boom is finally showing signs of petering out, that ought to come as no real surprise given the current constraints on the quantity of available and suitable candidates and the modest fall in labour demand,” he said.

“It is also clear that the quantity of redundancies is edging up, which will happen to be impacted by the strong headwinds facing the retail and automotive sectors.”

Meanwhile, Alpesh Paleja, principal economist at the Confederation of British Industry (CBI), said: “Despite signs that employment growth is tailing off, the labour market remains tight, with the unemployment rate at a multi-decade low. It's encouraging that pay growth has picked up further, putting more income in people's pockets.

“But as recent data shows, productivity remains in the doldrums. Reinvigorating efforts to enhance productivity is critical. Firms must concentrate on innovative methods to share new ideas, invest in people and technologies.”

With pay figures showing that wages in tangible terms continue to be underneath the pre-financial crisis peak, TUC general secretary Frances O'Grady called around the government to aid the economy.

“Wage growth continues to be below pre-crisis levels. Today's figures are little consolation for workers still feeling the effects from the longest pay squeeze for 200 years.

“Working individuals are facing huge uncertainty. Using the Bank of England expecting growth to flatline, the federal government must act to support the economy.

“Ministers should raise the minimum wage to lb10 as quickly as possible, and increase public investment, including on public services. And unions must have the freedom to enter every workplace to barter fair pay rises.”