Responding to the latest official labour market statistics for the UK, showing the unemployment rate fell to 3.8%, Tej Parikh, Senior Economist at the Institute of Directors, said:
“The labour market remains in fine fettle, and continues to break new ground.
“Businesses have steadfastly expanded their workforce whilst the fog of uncertainty clouds longer-term investment decisions. After a long period of relentless hiring, however, the momentum behind employment growth appears to be slowing as there are fewer workers available to fill skyrocketing vacancies. Firms are having difficulties recruiting right across the board, from engineering technicians to hospitality staff.
“The competition to attract talent has pushed up wages to the benefit of households over recent months, but we would expect salaries to be growing faster given the prevailing low rates of unemployment. Businesses are facing a slew of higher costs and weak productivity growth, which limits their wiggle room to up pay packets.
“The jobs boom has no doubt kept the economy ticking along but for many businesses progress on skills, training and education policy could not come sooner.”