Call us on 0844 324 5840


Brexit fears blamed for fall in UK employment

Brexit | HR Solutions

Employment has fallen for the first time in over a year as fears over Brexit start affecting the jobs market.

According to the Office for National Statistics (ONS), the employment rate slipped from a record high of 74.5% to 74.4%. The first drop since February to April 2015.

Some experts suggest that the labour market is only wobbling now because employers were initially unconcerned by the Brexit vote. But now post-Brexit vote worries have kicked in and started to impact recruitment.

Unemployment figures have continued to fall, dropping 16,000 to 1.62 million, while the unemployment rate remains at an 11-year low of 4.8%. But ONS say that despite the employment rate staying high, it is slightly down on recent figures.

Average pay growth picked up more than expected to 2.6% including bonuses, from 2.4%. But the number of people of working age unemployed and not looking for or available to work jumped by 76,000 over the period to 8.9 million.

Uncertainty ahead

Economists are warning that next year will be a tough year for workers in the UK. Unemployment is expected to rise as the economy slows, businesses grapple with higher costs and dipping demand and increasing uncertainty over Brexit.

Inflation data released last week showed the annual rate rose to 1.2% in November from 0.9% in October. It was the highest level in more than two years and a signal that the pound’s drop in value since the Brexit referendum is pushing the cost of living even higher.

It’s expected that inflation will rise sharply next year to around 3%, putting even more of a squeeze on household finances.

The labour market has given a mixed picture over the last three months. Employment levels have remained near enough the same and unemployment has experienced a slight drop. Although wages have risen slightly, so has inflation, hitting incomes.

Boosting productivity across the UK is essential for employers to be able to raise wages sustainably.

Employment blackspot

The West Midlands trails behind other parts of the UK on living standards and employment. The Resolution Foundation, a government thinktank, has linked the region’s growth, pay and income problems to pro-Brexit feeling and the favouring of cities like Manchester and London for investment.

At 64.5%, compared with the average 70.9%, the West Midlands has the lowest employment rate of any other big city. It falls significantly behind the UK average for growth, pay and income.

The region includes Birmingham, Coventry and Wolverhampton with a combined population of 4 million. It had the lowest employment rate of a city region as the UK entered the economic downturn. Employment prospects have only just started to pick up, but at a very slow pace.

The report highlighted how young people, black, Asian or minority ethnic works and low-qualified workers struggle to find work.

The thinktank is now urging the government to do more to help Birmingham and the surrounding area. But with elections for a new mayor next year, there is some hope on the horizon. They will have responsibility for transport, adult skills and planning and oversee a £1.1bn investment fund.





Got questions? Looking for advice?


Explore our comprehensive library of related resources to gain valuable insights, expert tips, and helpful tools for optimising your HR practices.

Employment and the 2017 General Election
6 June 2017
Recruiter email accusing jobseeker of lying on CV sent to him by mistake
24 May 2017
McDonald’s UK zero-hours workers could switch to fixed contracts
19 May 2017

Strategic HR thinking whitepaper

Our latest HR whitepaper offers an in-depth analysis and strategic framework aimed at transforming Human Resources into a pivotal element of business success in the rapidly evolving corporate environment of 2024.


Register your details below and we will contact you regarding how HR Solutions can support your organisation.


We’re here to assist you with any questions or enquiries you might have. Simply fill out the form below, and our dedicated team will get back to you.


We’re here to assist you with any questions or enquiries you might have. Simply fill out the form below, and our dedicated team will get back to you.


Please complete the form and one of our team will call you back to discuss your query/booking.

Request your free trial

Register your details below and we will contact you about your 30 day free trial of the HR Knowledge Base.


Register your details below and we will contact you about access to the HR Knowledge Base.  As part of your approved industry membership organisation you can get access to the HR Knowledge Base, created by Business HR Solutions, which is the go-to resource for thousands of business owners and managers across the UK.


Our latest 2023/24 SME Business Survey sheds light on the intricate dynamics shaping the SME sector and unveils critical insights that can guide businesses toward sustainable success.


HR Solutions are here to help. We offer a standard hourly rate package for ad hoc HR advice which means you can pay for what you need, whenever you need it, and then quickly get advice. Our highly experienced advisors are on hand to provide you with practical employment advice to help you manage your workforce.  You can purchase HR Advice Line time now, and the time purchased will be valid for 12 months.