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City employment hit by Brexit uncertainty

City employment hit by Brexit uncertainty

Years of Brexit-related uncertainty has led to stagnation in the jobs market as financial services firms and job seekers are unwilling and unable to take risks, according to Morgan McKinley’s London Employment Monitor.

The quarterly data found an increase of just 9 per cent of jobs available in the first three months of 2019 compared with the previous quarter, and 2 per cent in those hunting for a new role. 

In spite of the small increase, Morgan McKinley stated the city jobs market has shrunk, with jobs and job seekers dropping year-on-year by 9 per cent and 15 per cent respectively.

Hakan Enver, managing director of Morgan McKinley Financial Services, said: "The inability of the government to reach consensus on a Brexit deal has crushed confidence among City employers.

"Even with all the uncertainty of the last few years, there was always an assumption that come March 29, 2019 we would have some answers. Yet here we are, still waiting.

"With the Brexit deadline having been extended til the 31 October, the stress on businesses is showing no sign of letting up.

"The government had over two years to do its homework and complete the assignment. They didn’t do the homework, they didn’t complete the assignment and now they’re asking for one extension after the other as jobs continue to flow out of London with Dublin being by far the biggest beneficiary, followed by Luxembourg, Paris, Frankfurt, and Amsterdam. It’s astonishing."

The figures from Morgan McKinley’s monitor corresponded to those from other groups including the PMI survey by IHS Markit and BDO’s Business Trends report. 

The former found that service sector growth had almost ground to a halt in January, while BDO stated with a no-deal Brexit being the legal default outcome of the current stalemate, business confidence was crippled. 

The latest quarterly CBI/PWC survey meanwhile found last month optimism for UK financial services had fallen at its fastest pace since the finance crisis of 2008.

Peter Hemmington, corporate finance partner and national head of M&A at BDO, said: "While a slowing UK economy and a gloomy global outlook will be undermining firms’ confidence, political uncertainty is the most immediate factor weighing on sentiment."

He added, however, that firms’ hiring plans were yet to be documented in official data from the Office for National Statistics. 

He said: "The latest data from the ONS show that this has yet to feed into the overall figures on the UK labour market.

"In the three months to January 2019 the employment rate rose to 76.1 per cent, which is the highest estimate on record, while simultaneously the economic inactivity rate fell to 20.7 per cent, its lowest ever level.

"The number of people aged 16 years and over in employment rose to 32.71m people, 473,000 more than for a year earlier."

Mr Enver added: "Right now, if you’re ambitious and hard working, studying and working in the UK is looking less and less like the way to get ahead.