The weeks leading up to the Brexit vote saw the news and media cycle jolt into hyper-drive, with both sides pumping out an endless stream of the most striking headlines followed by articles making the most remarkable of claims. One side confidently saying that the UK leaving the EU would lead to deeply negative economic consequences for both the UK and the rest of the world unlike any we have seen before and the other side saying that all doomsday scenarios are overblown and that everything will be absolutely fine.
Now that it’s been a number of weeks since the majority vote for the UK to leave the EU has been announced and that, at least some, of the dust has settled, we can now begin to take a look at the result of the decision. So what has been the real result? And more specifically, what has been the effect of the vote to leave on UK employment? This latter question is the one we are going to focus on and the one we are going to address in this article.
Brexit’s Effect On Employment.
The most recent figures from the Office For National Statistics, which refer to the month of the referendum vote, clearly shows that the number of people in work rose to the highest on record at 31.75 million people in the second quarter of the year. In other words, this is an employment rate of 74.5%. Conversely the unemployment rate has held steadily low at a rate of 4.9%.
So, based on these reliable statistics one could quite rightly assume that the vote to leave the EU has had very little if any short term negative impact on UK employment. Good news all round, right? Well not exactly…
A Big “But”.
There is one big “but” and that is that it is still very early to make definitive statements on the effect that such a monumental, far reaching and globally significant vote has had on UK employment rates. For example, a number of large multinationals have recently announced that they will likely be cutting thousands of UK jobs due to the economic pressure placed on them by the Brexit vote and that these cuts will be made at a later date and not immediately. Other multinationals have said they will be redirecting future investments that were going to be made in the UK to other countries as a result of the vote.
So in short, the negative ramifications of the vote to leave may take many months, perhaps even years to materialise and then show up in labour and employment statistics, as companies, specifically large ones, make decisions now that are executed in the future, not right away. And this is all assuming we exit the EU in a reasonable time frame or if we ever even leave at all. The size and scope of the decision to leave the EU really cannot be overstated and leaving the EU is something a country of our size and stature has never done before. So understandably there is still a lot of confusion and uncertainty surrounding the whole thing.