OECD says Brexit now a 'cloud' on jobs market
Britain's decision to leave the EU could result in a 3% loss in GDP by the end of the decade and is likely to hit employment, a leading economic think tank has said.
The Organisation for Economic Co-operation and Development (OECD) also cautioned that a decline in foreign direct investment resulting from Brexit could worsen UK productivity.
The OECD said that the result of the June 23 referendum on EU membership represented "a cloud" over the UK's strong performance on job creation since the crash of 2008.
In its annual Employment Outlook report, it stated: "The UK's short-term labour market prospects are likely to be negatively affected by the recent referendum decision to leave the EU. OECD estimates suggest that Brexit could cut real GDP growth by 0.5 percentage points in both 2017 and 2018, and that by 2020 the cumulated loss in GDP could be 3%.
"Brexit therefore represents a cloud over the UK's recent ability to create jobs."
TUC general secretary Frances O'Grady urged the Government to step up investment in job-creating infrastructure schemes to ward off the danger of a Brexit-fuelled spike in unemployment.
Ms O'Grady said: "Workers are still paying the price from the last recession, with UK wage growth far behind the rest of the OECD. With the OECD warning that Brexit will harm jobs and growth, we need urgent action from Government to make sure that workers do not pay the price again."