‘Significant proportion’ of UK workers face falling living standards, with lower pay rises and higher unemployment predicted.
British workers should brace themselves for rising unemployment and falling real pay in the year ahead as the impact of a Brexit slowdown is increasingly felt in the jobs market, reports have warned.
The era of rapidly increasing employment is over, according to the forecasting group EY Item Club, which on Monday predicted the unemployment rate will rise from 4.7% now to 5.4% in 2018 and 5.8% in 2019.
At the same time, UK firms are planning to give workers a pay rise of just 1% over the next 12 months, sharply lower than the rate of inflation, which is 2.3% and expected to rise over coming months.
Pay expectations are now at their weakest in three and a half years, according to the survey of more than 1,000 employers by HR specialists the CIPD and Adecco, the recruitment agency.
“The good news in this latest survey is that employment confidence remains positive, with sectors like manufacturing and production proving particularly buoyant,”said Gerwyn Davies, a labour market adviser at the CIPD.
“The bad news is that there is a real risk a significant proportion of UK workers will see a fall in their living standards as the year progresses, due to a slowdown in basic pay and expectations of inflation increases over the next few months.