Fears of ‘labour market shock’

POST-BREXIT IMMIGRATION curbs will result in a “labour market supply shock” and lead to higher automation and job offshoring rather than higher wages for British workers, a report suggests.

The hard-hitting report from Deutsche Bank warned there is little to support the “familiar Brexit narrative” that a drop in immigration will force companies to “pay-up” for domestic workers, particularly in low-skilled industries. It said that Japan in particular should “serve as a warning” for those who believe a tighter labour market should automatically raise wages, noting that the east Asian country has reduced hours rather than hiking pay.