LONDON — The weak outlook for the UK economy will outweigh any potential pay rise for British workers if the country’s EU exit leads to immigration cuts, a report warned on Monday.
Future cuts to immigration could have a positive impact on the income of some British workers, but they will still be exposed to Brexit’s impact on the broader economy, the Resolution Foundation think tank said.
Cleaners, security employees and sales staff are among those who have seen their income fall in recent years as a result of immigration, it said in an analysis.
These workers could see their income increase by between 0.2 and 0.6 per cent by 2018 if immigration fell immediately to tens of thousands a year - a key policy pledge by former prime minister David Cameron.
But such a salary boost would not shelter workers from the wider economic consequences from Brexit, the think tank said.
The Bank of England earlier this month issued its biggest-ever downgrade of a GDP forecast in the light of Britain’s looming EU exit.
Its growth forecast was slashed from 2.3 per cent for both 2017 and 2018 to 0.8 per cent next year and 1.8 per cent the year after.
"Those expecting a wage boost off the back of a post-Brexit fall in migration are likely to be disappointed," said Stephen Clarke, a policy analyst at the Resolution Foundation.
"Any such gains will be dwarfed by the losses caused by the post-referendum slowdown in the economy."
Immigration was a focus point of the June 23 referendum, with campaigners to leave the EU calling for an end to freedom of movement for members of the bloc.
The Resolution Foundation said overall the increase in immigration over the past 10 years has not had an impact on the wages of British workers.
The think tank warned a cut to migration would prove challenging for food and clothing manufacturers, as well as domestic personnel services, which rely more heavily on a foreign labour force.
Prime Minister Theresa May, who replaced Cameron following the referendum, has said she intends to guarantee the rights of EU citizens currently living in Britain.
May said her promise depends on the rights of British citizens living in other EU countries being guaranteed after the UK leaves the union, which is not expected to happen before 2019. — AFP