Britain has lost 65,000 retail jobs since Brexit vote

QMB's Piggy Bank Brexit Jobs Tracker
QMB's Piggy Bank Brexit Jobs Tracker

Britain has lost 65,000 retail jobs since it voted to leave the European Union, a decline fueled by increased online competition and a Brexit-induced wage squeeze.

Employment data published Wednesday show the number of jobs in the sector dipped below 5 million in September. Weak consumer spending suggests more pain to come over the holiday season.

"It reflects the pressure on the [retail] sector," said Howard Archer, an economic adviser to EY. "Consumer spending has been softer for most of this year and retail sales have been lower."

Data compiled by IHS for Visa (V) show that spending in U.K. brick-and-mortar stores dropped 3.5% over the previous year in November. It was the seventh consecutive monthly decline, and one of the biggest drops since 2012.

Meanwhile, online spending was 2.4% higher in November.

Visa said it expects total consumer spending to decline this holiday season for the first time since 2012.

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Experts say the trend is one consequence of Brexit. The value of the pound dropped sharply after the vote in June 2016, causing the price of imported goods to shoot up.

At the same time, wage increases haven't kept pace with inflation, which stood at 3.1% in November.

Many borrowers have also been squeezed by the Bank of England, which hiked interest rates in October.

Andrew Wishart, U.K. economist at Capital Economics, said retailers are still trying to hire workers, but weak pay growth has made the jobs less attractive.

Related: 17 years without a raise? Welcome to Brexit Britain

Overall, British unemployment is still at just 4.3%, its lowest level in decades. There have been big gains for jobs in construction and hospitality.

But weakness in the retail industry underscores worries that there may be harder times ahead.

Wednesday's data show the number of people in work dropped by 56,000 in the three months ended October.

"The fact there [are] fewer people in work is bad news ... it shows we are not making full use of our resources," said Yael Selfin, chief economist at KPMG in the U.K.

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