MYTH 1 - Immigration - Restricting Migrants from the EU will lead to better prospects for UK workers.
Although there are manifold socio-political contentions,it is difficult to conclude that the UK economy has not benefited from the increase in immigrant labour from Europe (immigration from outside the EU is another matter). Most immigrants are working age and relatively well-educated, offsetting the negative effects of the country’s own ageing population. However, public services may come under pressure if migrant workers stop returning to their native countries upon retirement.
The academic literature confutes the idea that immigration from the eurozone has taken away jobs from UK nationals and depressed over all wages. There appears to be no correlation between immigration and rates of unemployment for UK natives when one looks at county-level data, for example. Although immigration may have put downward pressure on wages for the very lowest-skilled workers, some studies suggest it has actually increased those across the rest of the market. Therefore, we would not expect wages to increase (pushing up inflation) or the unemployment rate to fall significantly if the UK votes to leave the EU.
If you would like to receive a copy of the white paper, 'If you leave me now', which explores the implications of Brexit for the UK economy and markets, and/or a copy of "Breaking up is hard to do" which explores the implications for investments and currency for investors, please contact us on +351 289 392484 or email us at info@privatefund.management.
Private Fund Management would like to thank Rathbone Investment Management of Mayfair London for their kind permission in allowing the reproduction of this "Brexit" article. In the following weeks, we will be publishing the "Five Myths" relating to the "Brexit" debate, leading up to the referendum.
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