UK jobless rate holds at 4.9% despite Brexit

British building firm says 600 jobs at risk

LONDON: Britain’s jobless rate held at 4.9 percent in the three months to the end of August, official data showed yesterday, signaling little impact thus far from the shock Brexit vote. The Office for National Statistics (ONS) said the JuneAugust rate-a low for 11 years-matched the 4.9percent figure for the three month period that ended in July. The nation’s jobless total meanwhile stood at 1.66 million people over the same period. That was 118,000 fewer than a year earlier. “All in all this (data) suggests that Brexit has hardly had any measurable impact on the UK labor market yet,” noted economist Kay Daniel Neufeld, at the Centre for Economics and Business Research think tank.

“Unemployment has been low throughout the year and wages continue to grow at a subdued but steady rate.” British Prime Minister Theresa May has already stated that she will trigger the two-year process to exit the European Union by the end of March 2017, after the surprise approval of the Brexit referendum on June 23. Commentators also warn that the jobless rate could head higher before the end of this year.

“We suspect both the economy and the labor market will be increasingly pressurized by mounting uncertainties over the coming months-particularly once the government triggers Article 50,” said IHS Markit economist Howard Archer. “We also expect growth to slow as consumer purchasing power is increasingly squeezed. “Consequently, we see the unemployment rate starting to trend up before too long and suspect that it could reach 5.0 percent by the end of 2016.”

Meanwhile, British building materials supplier Travis Perkins said yesterday that up to 600 jobs were at risk from the uncertain economic outlook arising from Brexit. The company which serves professionals and consumers employs a total of 28,000 people at 2,060 stores that include Tile Giant, Tool Station and Wickes. A company spokeswoman said that the Brexit was one of the major factors behind the gloomy outlook, adding that affected jobs were at trade-facing businesses.

Travis Perkins also warned annual underlying profit, or adjusted earnings before interest, taxes, depreciation and amortization (EBITDA), would be below market expectations of £415 million ($509 million, 462 million euros) — and blamed weak plumbing and heating results. The news sent the group’s share price sliding almost seven percent in morning deals on the London stock market, topping the fallers’ board on the FTSE 100 index.

“Given that levels of future demand remain difficult to predict, the group has chosen to implement a number efficiency programs and branch closures to further optimize the network,” Travis Perkins said in a statement. “This work includes the closure of ten smaller distribution and fabrication centers, the write off of certain IT legacy equipment and over 30 branch closures in our trade businesses. “All of the 600 affected employees are aware of the changes.” British Prime Minister Theresa May declared last month that she would trigger the two-year process to exit the European Union by the end of March 2017, after the surprise Brexit referendum that was held earlier this year. —Agencies