Prognosis for labour market in 2017 'fairly bleak' with jobless rise predicted

Unemployment will increase in 2017, fewer new jobs will be created and there will continue to be downward pressure on pay, a report is predicting.

The UK will continue to suffer from low productivity and continued uncertainty about the arrangements for leaving the European Union, said the Chartered Institute of Personnel and Development (CIPD).

The group said the next 12 months will be even more challenging for the Government and businesses, with pay, Brexit, productivity and the gig economy dominating the labour market.

Ian Brinkley, of the CIPD, said: "The Brexit vote didn't cause the economy to fall off a cliff edge in 2016, but there's been a clear loss of confidence in international markets signalled by the fall in the pound and slowing inward investment.

"The single biggest thing that the Government could do to help in 2017 would be to give businesses greater certainty over the direction of travel, the residence status of migrants already in the country and the likely extent of restrictions on new flows of migrants.

"Very few employers want a 'hard' Brexit and the Government must consider this when planning its strategy for both the final arrangement and the transition towards it. We simply cannot afford for businesses to live in limbo."

The report said the prognosis for the UK labour market in 2017 is "fairly bleak", with slower economic growth, increased unemployment, fewer new jobs and a lack of pay rises for most workers.

Employment stopped growing between May and October and this trend of weak job growth is expected to continue into 2017, said Mr Brinkley, predicting a modest increase in unemployment with fewer new jobs - possibly as few as 100,000 - being created throughout the year.