Job growth in London storms ahead of UK average, but introduction of National Living Wage could see employers in sectors with lower wages relying on younger workers or cutting jobs

Hayley Kirton
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U.S. Employers Add 207,000 Jobs In July
Hiring intentions may look strong now but National Living Wage could shake that (Source: Getty)

Demand for jobs across the UK is at the strongest it has been in years, with London racing out in front, according to a report out today.

The study by ManpowerGroup pegged the net employment outlook – the proportion of employers who plan to hire staff less the proportion who plan to reduce their workforce – for the UK at seven per cent for the second quarter in a row.

Meanwhile, in London, net employment outlook was notably higher at 10 per cent.

However, the impending EU referendum as well as the upcoming introduction of the National Living Wage is giving some employers a reason to be cautious.

"British businesses continue to create the job opportunities that have helped get Britain back to work since the 2008 financial crisis," said James Hick, managing director at ManpowerGroup Solutions. "But while there’s clearly the demand for workers, we also need to protect the supply of talent. Employers of all shapes and sizes rely on the free movement of people inside Europe to find the skills they need."

Read more: Radical thinking needed to achieve full employment

ManpowerGroup also discovered that net employment outlook for retail, which is a sector known for lower than average wages, was eight per cent – the highest it has been since 2007 – suggesting some employers are looking to hire younger workers now in preparation for the incoming wage rises for those aged over 25.

Hick added: "We expect many to reduce pay for overtime and bank holidays or to flatten their structures and reduce the number of better-paid supervisory roles. The next six months will show the effect any ‘leveling down’ of wages has on the workforce, and long term we believe there will be job cuts."

Hick also warned that some employers had already suggested that they might turn their back on the UK should June's vote results in a Brexit.

"For example, HSBC has threatened to shift 1,000 banking jobs from London to Paris if Britain leaves," Hick said. "We think there’s a real danger this could be the tip of the iceberg."

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