A British economic think tank has reported that the country will experience a rising unemployment in the years ahead as a result of upcoming divorce from the European Union, commonly known as Brexit.
According to the forecasting group EY Item Club, unemployment rate will rise 0.7 percent in 2018 and 0.4 percent in 2019, and job markets will be the most influenced sectors of the Brexit slowdown.
The survey also showed that pay expectations are at their weakest in three and a half years as firms are planning to give a pay raise of 1 percent that is lower than the rate of inflation, which is 2.3 percent and expected to rise over coming months.
Experts warned this could create higher levels of economic insecurity among workers.
“The good news in this latest survey is that employment confidence remains positive, with sectors like manufacturing and production proving particularly buoyant,” said Gerwyn Davies, a labor market adviser at the Chartered Institute of Personnel and Development (CIPD).
“The bad news is that there is a real risk a significant proportion of UK workers will see a fall in their living standards as the year progresses, due to a slowdown in basic pay and expectations of inflation increases over the next few months,” Davies added.
“This could create higher levels of economic insecurity and could have serious implications for consumer spending, which has helped to support economic growth in recent months.”
Last week, the Bank of England warned about the economic fallout in the aftermath of Britain’s vote to withdraw from the European Union, saying it is already starting to make families poorer.
Mark Carney, the Governor of the Bank of England, speaking at a press conference in London on Thursday, said the impact of Brexit would contribute to a dramatic drop in payments this year and that average workers would lose hundreds of pounds in wages.
The grim outlook for Britain’s economy comes three weeks before a general election that will decide Brexit’s framework as put forth by Prime Minister Theresa May.