Brexit fears and the introduction of the national living wage are holding down pay and stopping firms from taking on staff, the latest jobs report from Adzuna suggests.
The online recruiters said that advertised salaries for vacancies in the UK stood at £33,815 in March — down two per cent on last year — while the total number of jobs that were up for grabs was 1.16m – the same number as in February.
Vacancies in the retail sector were down seven per cent in the month before the national living wage — a £7.20 an hour minimum wage for all workers over the age of 25 — came into force. A number of companies, particularly in the food and drinks industry such as Caffe Nero and Zizzi, have cut staff perks such as free lunches in order to pay the living wage.
Read more: Is the labour market stuttering?
The number of roles in the manufacturing industry also dropped by three per cent in February.
“It’s a time of turbulence for the jobs market,” said Doug Monro, co-founder of Adzuna. “Unemployment is climbing and political uncertainty could well be impacting hiring plans. In particular, recent reports indicate hiring permanent staff may be being put on pause until after the EU referendum as employers turn to temporary workers to fill gaps.”
The latest official jobs figures from the Office for National Statistics (ONS) showed that the number of people out of work increased in the three months to February, while wage growth came in at 1.8 per cent — its slowest pace for 13 months. A string of economists including at PwC, Capital Economics and IHS Global said firms were holding off hiring until after the EU referendum.
London saw one of the sharpest falls in advertised salaries, down 2.9 per cent over the year, though with the average job commanding a salary of £40,500 it still had the highest salaries of the country.
Wages for new vacancies declined 4.5 per cent in Scotland, the steepest drop in the country, as job cuts and hiring freezes by the North Sea oil and gas industry have pushed down salaries considerably.
University towns in the south of England were also most cushioned from the hiring slowdown, while towns in the north fared worst. In Cambridge, there was an average of just 0.08 jobseekers for every advertised vacancy, while in Sunderland — where competition was most fierce — there were 3.39.
Oxford, Bristol, Manchester and Exeter were among the other towns where there were more than four jobs for every jobseeker.