Articles From the Team
The Brexit Conundrum – Is Brexit holding back job creation and spending?
A recent article on the Business Insider website has brought to attention a recent note on Brexit by Elga Bartsch, Chief European Economist at Morgan Stanley.
The article leads with the headline: “Brexit is failing to massively hold back job creation and spending in Britain”, and the first paragraph highlights Morgan Stanley’s summation of the situation, simply put: “people in Britain should not be worried about losing their jobs or not being able to find employment in the short-term”. “Firms are still spending money and hiring”, “Britons are spending their cash”, and certainly until Article 50 is triggered, “nothing in Britain has actually changed”.
This is the key passage from Bartsch and her team:
"At end-2016, hiring intentions across different sectors of the economy, which we use to predict employment growth, show that companies remain in hiring mode and on average plan to expand staff levels in the next three months. Thus far, companies have only scaled back the pace of their hiring though. As a result, consumers are not overly worried about the risk of becoming unemployed over the next 12 months.
"With GDP growth likely to stay above potential, we expect job creation to continue and the unemployment rate to fall towards the Non-Accelerating Inflation Rate of Unemployment (NAIRU), estimated to be ~9.0% of the labour force, even though the labour force is set to rise faster."
With interest rates at a record low of 0.25%, and Article 50 not yet triggered, the article surmises that people and companies are spending their money and taking advantage of the lower cost of borrowing. So, for now at least, people and companies “remain optimistic about their employment futures”.
BCL Legal – opinion
The Morgan Stanley report is an accurate appraisal of the job market as we see it at BCL Legal. Companies are very much in hiring mode and we have seen companies and law firms actively seeking to recruit additional staff. Across the UK, in the majority of industry sectors and at every level - Paralegal to General Counsel – we have seen significant activity.
2016 has been a very busy year and at present there are no signs of this abating. Despite all the talk of Brexit means Brexit, triggering Article 50, a hard or soft exit, protectionism and special deals etc., ultimately nothing has changed and many of our clients are carrying on as normal.