U.K. job seekers are starting to see the impact of Brexit, with salaries under pressure and companies advertising more contract positions as they resist committing to permanent hiring.
The average advertised salary was 32,688 pounds ($43,174) in July, down 2.4 percent from a year earlier, according to an index by job search engine Adzuna published Tuesday. When inflation is taken into account, real earnings have fallen 3 percent, it said.
While the Bank of England expects continued wage growth, the weaker pound may push up inflation, eating into real incomes. Adzuna said Brexit has played a role in the “widespread stagnation” in salaries, as industries such as finance with higher-paid workers delay hiring and “wait for political and economic decisions to become clearer.”
The labor market remained relatively stable in the run-up before the European Union referendum, though there were some signs of weakness at the end of the second quarter. Companies added 172,000 jobs in the three months and the unemployment rate stayed at 4.9 percent.
“The resilience of the jobs market can’t be forgotten,” said Doug Monro, co-founder of Adzuna. “The unemployment rate has fallen to levels not seen since 2005 and this is hugely encouraging.”
The report showed the number of advertised positions rose 2.4 percent in July from a year earlier, though part time vacancies dropped 58 percent.