The Daily Telegraph
Brexit has boosted UK wages as Leave campaign said
BREXIT has boosted wage growth in the UK just as the Leave campaign predicted it would, economists have said.
Senior City analysts said that near record-wage growth was partly being driven by a crackdown on uncontrolled immigration from the EU, with employers forced to pay more for low-skilled roles previously filled by Europeans.
Marion Amiot, a senior European economist at rating agency S&P, said: “It’s much harder to get people from Europe so UK based-employees have better bargaining power and it means they can get higher wages.”
Mabrouk Chetouane, the head of global market strategy at the French investment bank Natixis, said the change in the labour market was “obvious” but said Brexit appeared to have become “taboo” when talking about it.
He said: “We have decent labour demand but when you look at the supply, it has been cut massively due to Brexit. It creates an imbalance that continues to fuel wage growth and this is here to stay.”
The comments come after figures last week showed that wages, excluding bonuses, were growing at a near-record pace of 7.7pc This is just 0.1 percentage point lower than the peak seen over the summer, which was the highest since comparable data began in 2001.
Leave campaigners repeatedly argued during the referendum campaign that quitting the EU would drive up pay in Britain.
Ms Amiot said: “We have seen immigration is still quite high on a net basis but it’s not the same immigrants, so the skill set they bring is a bit different from before.” Net migration reached a record high of 606,000 in the year to June 2022.
Jack Kennedy, a senior economist at hiring website Indeed, said he believed Brexit was “certainly likely to be a contributory factor” towards faster than expected wage growth for unskilled jobs.
He said: “Our own Indeed wage tracker data shows a lot of the categories where wage growth remains highest are the ones where we know Brexit has been an aggravating factor in terms of being able to fill staffing gaps ... a lot of the lower paid sectors are seeing pretty strong rates of wage growth of between about 7pc to 10pc in our data.”
Other factors include a wave of early retirement post-covid and an increase in long-term sickness post-pandemic.