Brexit Impacts U.K. Job Market as EU Workers Fall by Record

(Bloomberg) -- The number of European Union workers in the U.K. fell by the most on record, intensifying labor shortages as Britain prepares to leave the bloc next year.

There were 2.25 million EU nationals employed between July and September, 132,000 fewer than a year earlier, the Office for National Statistics said on Tuesday. In contrast, the number of non-EU workers in Britain grew by 34,000 to 1.24 million, the ONS said.

The data comes at a time when U.K. Prime Minister Theresa May said talks with EU for a divorce deal are in the “endgame,” but there’s no clarity on how Britain’s job market will shape up once the country exits the bloc on March 29. In a sign that there’s no spare capacity in the labor market, U.K. wage growth accelerated to the fastest since 2008, with productivity remaining subdued.

For the latest three month period, there were 881,000 people working in the U.K. from the eight east European countries that joined the EU in 2004, 154,000 fewer than a year earlier, according to the report.

A survey from Poland suggests the workers are staying in their home countries. Nine out of 10 Poles reject the idea of emigrating now, according to a survey published by Work Service SA on Tuesday. Since becoming an EU member, Poland has seen about 2.6 million of its 38 million people emigrate to richer Western European nations.

May’s post-Brexit immigration proposal plans to treat all nations equally, but give ministers the flexibility to tailor rules for countries they strike trade deals with. Under the new rules, high-skilled workers will be prioritized and low-skilled immigration curbed, but there’s no clarity on how those parameters will be reached.

To contact the reporter on this story: Anurag Kotoky in London at akotoky@bloomberg.net

To contact the editors responsible for this story: Fergal O'Brien at fobrien@bloomberg.net, Brian Swint, Paul Gordon

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