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Brexit: Expect worse labour market conditions and recession in the UK, warns economics professor from Westminster Business School

Ahead of the CIPD Labour Market Outlook (LMO) report on Monday 15 May, which highlights UK recruitment, redundancy and pay intentions, Professor Peter Urwin, Professor of Applied Economics and Director of the Centre for Employment Research at Westminster Business School, comments on why Brexit negotiations are driving the UK towards a recession, and what this will mean for the UK’s talent pool:

“This year will be a year of brinkmanship, tipping us into recession in early 2018, with unemployment rising from late 2018. Wages will likely stagnate into 2018 and we may even see a real-terms fall, if the labour market responds as it did following the 2008 recession. This suggests any rise in unemployment will be limited, as wages ‘adjust’, but favourable economic news from the continent will slow the supply of EU talent to a recession-hit UK. Employers need to get their strategies in place now, before the storm hits.

“Evidence suggests that the UK economy is slowing, with growth of 0.3% between January and March much less than expected. Rising prices and low wage growth are the most likely cause of a 1.8% fall in retail spending in March. It is difficult to say whether this is a blip or the first signs of a slump, but initial Brexit exchanges suggest the European Commission will be given free rein in negotiations, and this risks a serious downturn in the UK.

“Both the European Commission (EC) and the member states of Europe have a shared interest in ensuring a Brexit that does not favour the UK; but the member states interest in tempering this, to avoid negative economic impacts across Europe, is not shared by the EC. Recession in the UK would strengthen the hand of EC negotiators and it is therefore a realistic prospect for the start of 2018.”

About Westminster Business School: One of London’s leading centres for professional business education. Offering a wide range of innovative and practice focused programmes including MBA, professional and executive education courses. The School has a large and diverse academic body with extensive business, consultancy and research achievements. Accredited by leading professional bodies and collaborating in numerous international partnerships, the School engages in providing business expertise in consultancy, applied research and thought leadership to the industry. Westminster Business School continues to be committed to supporting organisational success.


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