World

Brexit Uncertainty ‘Causes U.K. Unemployment to Rise to 1.7 Million’

Unemployment
Jobseekers queue outside a Jobcentre Plus branch in London Bridge, March 18, 2009. The ONS said the number of people employed in the public sector has been generally falling since March 2010. Oli Scarff/Getty

U.K. unemployment rose by 21,000 to 1.7 million between December and February, the Office for National Statistics (ONS) said.

The first increase since the May to July period of last year, some economists have linked it to companies being deterred from taking on new staff due to uncertainty regarding the 23 June EU membership referendum.

The unemployment rate remained at 5.1 percent, which is still down on the same time last year, when it was 5.6 percent.

Earnings, including bonuses, rose by 1.8 percent in the three months to February, which is a slowdown from the 2.1 percent rate for the previous three-month period.

"It's too soon to be certain, but with unemployment up for the first time since mid-2015—and employment seeing its slowest rise since that period—it's possible that recent improvements in the labour market may be easing off," ONS statistician Nick Palmer said.

There were 31.41 million people in work in the three-month period, a rise of 20,000 on the September to November period.

"Last week the Bank of England said that concerns about the EU referendum had begun to affect the real economy," said Ben Brettell, senior economist at Hargreaves Lansdown, told the BBC.

"The increase in unemployment announced today adds some weight to that hypothesis. It's possible businesses are delaying decisions about hiring and investment until after June's vote, which could lead to a slowdown in the first two quarters of this year.

"Nevertheless, the bigger picture is that the UK labour market remains in reasonable health.”

The increase in unemployment was too low to change the rate when expressed to one decimal place, which stayed at a decade low of 5.1 percent.

The figures also show that there were 5.35 million people employed in the public sector for December 2015. This is slightly lower than September 2015 but it was down 50,000 from the end of 2014.

The ONS said the number of people employed in the public sector has been generally falling since March 2010.

There were 26.07 million employed by the private sector for December 2015 - that is 113,000 more than for September 2015 and 529,000 more than for a year earlier.

Comparing estimates between October to December 2014 and the same three-month period in 2015, the number of UK nationals working in the UK increased by 278,000 from 28.2 million while the number of non-U.K. nationals working in the U.K. increased by 254,000 to 3.22 million.