Commenting on the steepest fall in UK employment in over four years, Andy Scott, Associate Director at JCRA, said: “This morning’s employment data provides fairly clear evidence that the slowdown in economic output linked to Brexit uncertainty and broader global trends, are now hitting hiring. The labour market seemed to have been isolated from the overall weakening of the economy this year, but the steepest fall in employment in over four years shows businesses are getting ready for Brexit by cutting jobs.
“The strength of the labour market has been cited as one of the reasons the economy has fared better than was predicted in the immediate aftermath of the vote to leave back in 2016. The rise in annual wage growth – which hit four percent in July – has supported consumer’s willingness to spend. However, reports pointing to consumer spending also now slowing may be indicative of more uncertainty in the jobs market and could result in economic output turning negative, as we saw in the second quarter.
“The GB Pound showed a limited reaction to the economic news as it continues to trade solely on Brexit news, with Barnier’s optimism this morning for a deal driving the currency back towards its recent highs of 1.27 versus the Dollar and 1.15 versus the Euro. We remain very cautious over the market’s optimism and would continue to encourage prudent risk management against the risk of no agreement, as the last 2.5 years have taught us that any of the many parties in these negotiations can scupper a ‘last-minute’ deal at the last minute!”