The Institute of Directors has welcomed today’s jobs and wages figures which showed the employment rate (73.7%) at its highest ever rate, unemployment continuing to fall (down to 5.3%) and wages (up 3.0%) growing strongly ahead of inflation.
James Sproule, Chief Economist at the Institute of Directors said:
“It is good news all round in today’s jobs figures which are further proof that a vibrant economy is the best route to a vibrant labour market. Businesses across the country have powered this recovery and they should rightly be congratulated for creating jobs and raising wages in nearly every sector of the economy.
“For businesses, low inflation has allowed them to reduce risk through paying down debt, ramping up production, taking on staff and offering sustainable pay rises. For employees, strong confidence is shown by the fact that people may actually be cutting back hours now that hourly pay has increased. This should not be mistaken for ‘underemployment’, but rather optimism about the future.
“Looking forward, Britain is fast approaching full employment, and there is a danger that future wage growth will not be a result of better corporate performance, but competition for employees. With the employment rate at an all-time high and the number of vacancies near a post-crisis high, pay increases look set to remain a feature of the economy as confidence grows and employees push for wage increases.
“If the Bank of England needed any more evidence about the dangers of maintaining extraordinarily low interest rates, today provided it.”