Brexit cloud warning from economists over UK's booming jobs and wages

BRITAIN’s jobs and pay boom shows no sign of letting up, but ministers and economists warn that Brexit could still severely damage the economy.

Unemployment fell by 27,000 in the three months to February to 1.34 million said the Office for National Statistics. The number of people in work remains at a record high of 32.7 million.

And pay is rising at 3.4% a year, though wages have yet to return to the pre-banking crisis peak.

Jeremy Thomson-Cook, chief economist at WorldFirst, said: “There are few bright spots economically in the UK at the moment but the employment and real wage picture is certainly one of them.

“Regardless of what is going on in Westminster, businesses still need people to perform roles and a lower supply of labour is allowing for a run of higher wages in the face of a relatively benign inflation picture.”

Brexit fears also mean the Bank of England is highly unlikely to increase interest rates this year, keeping mortgage costs low.

One theory is that Brexit uncertainty is aiding job creation as firms decline to invest in new equipment, hiring staff instead.

Tej Parikh, senior economist at the Institute of Directors, said: “The elongated period of uncertainty has kept businesses in a hiring cycle. Many firms have lacked the confidence to put funding toward training, technology, and new machinery, which has in turn meant firms need to hire more workers.”

With the high street in crisis, retail is one area that is not creating jobs.

Pawel Adrjan, UK economist at job site Indeed, said: “With 457,000 more people in work than there were a year ago, one thing stands out amid the breathless pace of job creation; unlike some of the previous surges in employment, Britain’s current jobs boom was not made on the high street. In many parts of the country, the retail sector has been a passenger at best.”