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8/17/16

Britain: Brexit damage to economy will outweigh modest wage gains, says study - by Anushka Asthana and Larry Elliott

Damage to the British economy caused by Brexit will more than offset the modest wage gains for British-born workers in low-paid jobs caused by cutting net migration to the tens of thousands a year, a study has found.

A report by the Resolution Foundation thinktank said there would be a small pay increase to native-born employees in sectors such as security and cleaning if there was a big cut in the number of workers arriving in Britain from overseas.

But it estimated that these benefits would fail to compensate for the reduction in real incomes caused in the short term by the higher inflation triggered by a falling pound, and in the long term by a slowdown in the economy’s growth rate.

The Resolution Foundation also warned that achieving the government’s target of cutting annual net migration from more than 300,000 to the tens of thousands would present serious challenges for companies that rely on low-paid migrant workers – and could force some of them out of business.

Immigration was a significant factor in the referendum campaign, with a sizeable number of those who voted to leave the EU citing it as reason for supporting Brexit. Early last month, Theresa May, then home secretary, said the government had received a clear message from the electorate and needed to control the numbers of people coming into the UK from the EU.

Read more: Brexit damage to economy will outweigh modest wage gains, says study | UK news | The Guardian

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