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UK – City brain-drain will hurt the economy

09 September 2013

The City of London is facing a brain drain of talent that could eventually hit the UK’s economic growth, experts have warned. A deficit of workers threatens because of skills shortages, an ageing workforce, and a restrictive migration policy, according to the Association of Professional Staffing Companies (APSCo).

Almost 1.3 million Britons with university-level education are now living abroad, and by 2050, the UK is expected, for example, to have a shortfall of 10,200 qualified accountants. 

Ann Swain, chief executive of the recruitment trade body, said: “The recent positive economic data, coupled with a marked fall in unemployment is adding fuel to the growing skills shortages employers are experiencing. The skills shortages have always been there but as the recovery gains pace and employers have more confidence to hire, we could be facing a real problem.”

The warning was made as figures showed that the number of jobs in the financial services industry fell by -3.5% between July and August, from 7,056 vacancies to 6,804, according to Morgan McKinley.

The number of professionals looking for positions also fell. Around 5,816 people were on the hunt for City jobs in the month, -25% lower than in July. However, this can be largely attributed to the summer holiday season.

Hakan Enver, operations director at Morgan McKinley, said: “As we anticipated last month, the slight fall in August is not unexpected, given the holiday season, and we are experiencing all the signs of a bounce-back in activity in September.

“All the macroeconomic signs are pointing to this. The OECD has raised its UK growth forecast and last week’s Purchasing Managers’ Index revealed that the UK’s services industry grew at the fastest rate since 2006. There was also good news from the manufacturing and construction sectors and I am cautiously optimistic that this increased confidence will feed through into hiring figures during the final quarter of the year,” he added.

For those people who actually secured new jobs during the period, the average salary actually rose by +20% compared to a +17% rise the previous month.

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