EU referendum uncertainty sees UK employment growth slow in May

Employment at British companies rose in May but at the slowest rate in eight months due to EU referendum uncertainty and a lack of qualified candidates, recruiters said on Wednesday.

The Recruitment and Employment Confederation (REC) said permanent staff placements continued to rise in May but growth eased to an eight-month low. Temporary contract staff growth also slowed down after a 13-month high in April.

The slowdown in staff appointments came despite robust demand. Vacancies rose in May for permanent and short-term staff.

A rise in minimum wage under the National Living Wage rules in April provided a brief hike in permanent salary growth at the strongest rate in nearly nine years. However, it eased to a 31-month low in May.

The Office of National Statistics said 44,000 jobs were created in the UK in the first quarter of the year, down 195,000 in the last quarter of 2015; nonetheless the proportion of working-age people in jobs is at a record high.

Kevin Green, REC chief executive, said UK businesses are facing candidate shortages in engineering, catering, schools and health care and need staff with the right skills, but employers are reluctant to hire in the run-up to the EU referendum.

“Whatever happens post June 23rd we need to ensure a sensible approach to immigration is taken, so that employers have access to the people they need. Sourcing workers from outside the UK is going to be an ongoing necessity if we are to continue seeing the British economy grow.

“The UK job market has been incredibly successful over the last seven years because of its dynamism and flexibility. Policy-makers have a responsibility not to derail that success.”