London • The Bank of England (BoE) cited the loss of European Union (EU) workers as it warned that British companies are facing a mounting labour shortage.
“Recruitment difficulties had broadened across skills and sectors, which was reported to be partly due to reduced availability of EU migrant workers,” business contacts told the BoE last month, according to a summary published yesterday.
The comments are almost certain to fuel concerns about the effect Brexit is having on sectors such as hospitality and food manufacturing that rely heavily on EU workers.
Data published on Tuesday showed the number of EU nationals working in the UK fell in the first quarter (1Q) for the first time since 2010.
The loss was entirely due to a record 91,000 drop in employment among people from the eight eastern countries including Poland, Hungary and Slovakia that joined the bloc in 2004.
The BoE report also provided an overview of the broader economy. It said the labour market remained buoyant, despite heavy snowfall in March contributing to a “marked slowdown” in consumer spending.
Employment intentions had “ticked up” in manufacturing and economy-wide pay increases are now centred around 3% — slightly more than in 2017.
Higher awards are being targeted at retaining staff with “key skills”, which reflects the concerns over availability of migrant workers.
BoE policymakers, who opted to keep interest rates unchanged last week after a sluggish 1Q, could hike in August if growth bounces back as expected, according to Bloomberg economist Dan Hanson. — Bloomberg