How Brexit Impacts on Foreign Workers?
Given the seismic and emotive nature of Brexit, it should come as no surprise that net migration in the UK dropped to its lowest level for three years during 2017.
This plunge was not solely the result of anti-Euro sentiment, however, as the sustained devaluation of the pound has made the UK a far less attractive proposition for migrants and foreign workers from the EU.
In this post, we’ll look at how Brexit and a weak pound will continue to impact on foreign workers in the UK.
The Brexit Story so Far
In the aftermath of the Brexit vote in June 2016, the pound sunk to a 31-year low against the U.S. Dollar twice during a startling, six-month period. While the currency has since consolidated in some respects, of course, it continues to trade in a narrow range against the greenback and a raft of other major currencies.
The performance of the pound against the Euro is providing a particular course for concern at present, particularly from the perspective of foreign workers who are plying their trade in the UK. Most recently, the pound declined to €1.1239 against the Euro, while there is scope for further depreciation as the Brexit negotiations continue throughout 2018. So, while the recent decline in the value of the pound was attributed to a below-forecast construction PMI, this should not mask the underlying factors that are continuing to undermine the currency.
How Will This Continue to Impact on EU Workers?
Over the last 18 months, trading platforms like Oanda have chartered the sustained and inevitable depreciation of the pound. For EU nationals working in the UK, this has caused a steep devaluation in the value of their earnings, squeezing disposable income levels in a climate that has already been strained by soaring inflation. The situation is even worse for those who want to send money back home to their families and loved ones, as they must also factor in the cost of transferring funds electronically.
From an economic standpoint, this also means that working in the UK will become increasingly less attractive for foreign workers and EU citizens. This remains a key driver in the decline of net migration throughout the UK, as some nationals have already chosen to leave and seek out more competitive earning opportunities in nations such as Germany. Over time, this could create significant gaps within the UK’s labour market, while employers and agricultural firms may be forced to increase wages in a bid to retain their leading talent.