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Britain may not have left the EU yet but employers who rely on EU workers are already feeling Brexit-induced tremors in the labour market. From farmers to factory owners and hoteliers, anecdotal reports are emerging of European staff who want to leave — or who went home at Christmas and never came back.

But what do the data say? Is there any solid evidence about whether net migration to Britain — the issue at the heart of the country’s vote to leave the EU — has already peaked?

Isn’t net migration still at a record high?
It is hard to say because the official figures are so out of date. The latest numbers on migration flows, released on December 1, only cover the period to the end of June, so they include just one week after the Brexit referendum. Those figures showed no sign of a slowdown: long-term net migration from the EU was estimated at 189,000 in the year to June, the highest on record.

Looking beneath the surface, there was an increase in immigration from both original EU countries such as Spain and from the bloc’s newer additions, Romania and Bulgaria.

What other post-referendum clues are there?
There are two other sources of data worth watching for a sense of migration trends. First, the official labour market survey counts how many EU nationals are employed in the UK. The latest figures, for the period between July and September, show growth slowed to less than 30,000 people, down from an average of 60,000 per quarter for the nine months before the Brexit vote.

But the data are not adjusted for seasonal variations, and growth does usually slow at that time of year. The next set of data, due out on Wednesday, will shed light on whether this was more than a typical late-summer lull.

The other source is the number of EU nationals registering for national insurance numbers, which does seem to have levelled off recently. The next set are due next week. “The next few weeks [of data releases] should finally give us a real fix on what happened after the referendum,” said Jonathan Portes, an economics professor at King’s College London.

What are businesses saying?
It is clear that some employers are experiencing staff shortages, particularly in the sectors where turnover is high and a significant proportion of the workforce comes from the EU. The manufacturing, food and accommodation industries are squarely on the front line, relying on EU workers for 10 and 13 per cent of their workforces respectively. And these sectors are ringing the alarm bells the loudest.

Take the National Farmers Union’s quarterly survey of labour providers, which found 47 per cent were reporting shortages, up from 13 per cent in the second quarter and zero in the first. But small surveys and anecdotes, while a useful indicator of trends and shifts, cannot give a robust sense of the scale of a phenomenon.

UK labour chart 4

Will employers raise pay to attract UK workers instead?
One poultry farmer told the FT he had raised wages by 15 per cent to compete for scarce staff. But so far, he sounds like the exception. A survey of 1,000 employers by the Chartered Institute of Personnel and Development this week found that employers’ top three responses to labour shortages were to leave jobs unfilled, train up existing staff, and recruit more apprentices. The least popular option of all? “Increase pay to attract more UK-born nationals.”

UK labour chart 3

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