Responding to latest official labour market statistics, showing employment rose by 388,000 compared with a year earlier, Tej Parikh, Senior Economist at the Institute of Directors, said:
“Today’s figures underscore the UK’s resilient labour market, but sub-par wage growth remains a sting in the tail.
“Record levels of employment are fast becoming the norm, and the UK’s strong record for job creation should not be taken for granted. In the face of significant headwinds, businesses are still finding ways to generate new working opportunities. On the flip side, increases in pay have proven difficult to come by. This is partly due to heavy cost-pressures, but more fundamentally Britain’s weak productivity growth must be addressed.
“This new data will no doubt be pored over by the Bank of England’s Monetary Policy Committee (MPC). Clamour for an August interest rate rise has been building, but the sluggish pay growth should give pause for thought. The Bank should pay heed to the array of obstacles standing in the way of firms, from the burden of business rates to Brexit uncertainty, when it comes to making its decision.”