More than 300,000 European workers have left Britain in the past two years as a pandemic exodus deepens labour shortages that are stifling the economic recovery.
The number of EU nationals in the UK slipped by a further 5pc in the year to June 2021 despite the end of the winter lockdowns raising hopes of a rebound, according to the Office for National Statistics.
Since mid-2019, the number of EU nationals in Britain has tumbled by almost a tenth to 3.4m in the wake of the pandemic and stricter immigration rules.
The decline comes amid record job vacancies in the UK as sectors, such as hospitality and haulage, struggle to cope with widespread worker shortages.
While EU nationals are leaving the UK, those from outside the EU are creeping higher. The number of non-EU nationals rose by 136,000 in the last two years to 2.6m, partially offsetting the fall from the Continent.
Gerwyn Davies, labour market expert at the the Chartered Institute of Personnel and Development, said: “The abrupt halt in the supply of EU workers continues to cause shockwaves for employers across all sectors, particularly for hard-to-fill vacancies in low-paying sectors where EU citizens have been disproportionately employed.”
Economists have warned that the workforce could face a permanent hit from an exodus of foreign-born workers during the pandemic.
Many Europeans have retained the right to work in the UK after Brexit, but analysts are unsure how many of those who left will come back. Post-Brexit immigration rules make it tougher for new cheap labour from Europe to gain entry.
Mr Davies said the reduction in EU workers will concern the Bank of England as recruitment difficulties may contribute to a wage-price spiral.