Responding to latest official labour market statistics, showing there were 261,000 more individuals in employment compared with a year earlier, Tej Parikh, Senior Economist at the Institute of Directors, said:
“Despite a slight slowdown in pace, the ability of UK businesses to create jobs continues to defy expectations. Combining this with wage growth is no mean feat, the slight pickup this month is positive but it remains to be seen how long this can be sustained.
“Businesses are now in heated competition for skills. Vacancies are at an all-time high, and recruiters are finding it increasingly difficult to match available workers with job descriptions. In these circumstances, we would normally expect significant increases to salaries as firms attempt to attract the talent they need, but high costs and subdued productivity growth have impeded this somewhat.
“On the one hand, soaring business rates and the cost of complying with a raft of regulations are squeezing margins, particularly in smaller businesses which employ the lion’s share of our workforce. On the other, the investments that would enable businesses to get more from their staff and pay higher wages have been held back amidst an uncertain economic climate.
“With the Autumn Budget on the horizon, the Chancellor must look to provide support for business costs while incentivising investment.”