Demand for workers in London has reached a 10-month high as vacancies in the capital increase at the quickest pace since February – but concern about Brexit controls on freedom of movement has led to calls for a more open policy on immigration.
Recruiters found that permanent placements of workers with companies grew for the second month in a row, after declining in the previous six months, according to figures from Markit and the Recruitment and Employment Confederation (REC).
Meanwhile recruiters found the supply of workers in London fell for the 43rd consecutive month, with shortages reported particularly in audit, risk and compliance roles.
Signs of a job market favouring workers in the capital were further in evidence with the 43rd month of salary increases reported by REC members, although salary growth across the UK slowed to a five-month low.
REC chief executive Kevin Green said: “London has been disproportionately affected by the referendum.” However, the “jobs market is more or less back to the run rate before the referendum.”
Norman Lamb, the Liberal Democrat MP for North Norfolk and part of the pro-Europe Open Britain campaign, said: “We must avoid knee-jerk reactions on immigration and ensure that Britain remains open to talented and hard-working people from across the world, allowing them to continue to come and contribute to our economy and public services.”
Controls on immigration were a key part of the victorious Leave campaign in the EU referendum. Prime Minister Theresa May signalled at the weekend that the UK would likely leave the EU’s Single Market, which would allow restrictions on migration from the EU.
With unemployment at 4.8 per cent in October – its lowest point since before the financial crisis – employers are turning their thoughts towards staff shortages. Previous surveys have found staff shortages to be a key concern for businesses.
Green reports employer concerns on immigration controls, particularly in London financial services but also “in most parts of the labour market now”.
Immigration controls could also add further to inflationary pressure as the UK faces increases well above the Bank of England’s two per cent target rate.
“It would make a tight labour market that we’ve got even tighter,” and potentially force wages higher, said Green.