The latest labour market data was published by the ONS and the stats showed pay after inflation has risen at its fastest rate for more than three years, driven by strong wage growth in the private sector.
The labour market continues to be challenging for many businesses, with wage growth continuing to rise as firms compete for skilled workers. This is a concern as they face a significant rise in employment costs in April.
However, there are also signs of further loosening as unemployment ticks up, vacancies continue to fall and economic inactivity dips.
The full impact of the changes to national insurance and the minimum wage, announced at the Budget, won’t be fully seen until later in the year. However, the warning lights on recruitment, employment and training are already flashing.
The Chambers latest survey paints a worrying picture of weak workforce growth, persistent hiring difficulties and cuts in workplace training. It also revealed that 55% of firms are planning to put up prices, with labour cost the main driver.
To grow the economy, we need businesses and the workforce to thrive. Government must ease the cost-pressures on firms so they can invest in people. Working proactively with employers to tackle the long running skills crisis is likely to become even more important in the months to come.
