U.K. Labor Market Freezes Amid Brexit, Election Uncertainty

(Bloomberg) — Political uncertainty is “playing havoc” with the U.K. labor market, with demand for workers rising at the slowest pace for a decade and wage pressures easing, according to a report.

The survey by KMPG and the Recruitment and Employment Confederation published Friday found companies delaying or canceling hiring plans and people hesitating to take on new jobs last month amid the confusion over Brexit and the upcoming general election.

“Clearly employers and job-seekers are taking a wait-and-see approach before committing to growth or movement,” said James Stewart, vice chair at KMPG.

Prime Minister Boris Johnson is portraying the Dec. 12 vote as a chance to finally deliver Brexit and end the uncertainty that has taken a heavy toll on the economy. The jobs market, which has defied the turmoil since the 2016 vote to leave the EU, has lost significant momentum in recent months.

Johnson wants a parliamentary majority for his Conservative Party to get the deal he struck with the European Union through Parliament. His rival, Labour Party leader Jeremy Corbyn, has promised to renegotiate the exit agreement and then give the public the final say in a second referendum.

Here are the key findings of the KPMG/REC report:

  • November sees the slowest increase in vacancies since October 2009
  • Demand for workers weakest in public sector, retail industry
  • Permanent starting salaries rise at slowest rate since end of 2016
  • Number of permanent placements fall for a ninth consecutive month
  • Candidate numbers decline at fastest rate for five months
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