IoD press release Action needed to tackle further increases in economic inactivity

Commenting on this morning’s release of labour market statistics that showed an increase in the economic inactivity rate in the three months to April 2024, Alexandra Hall-Chen, Principal Policy Advisor for Employment at the Institute of Directors, said:

“With another small fall in vacancies and a small increase in the unemployment rate, there are signs that the tight labour market is starting to cool.

“However, the rise in economic inactivity over both the quarter and the year is an area of concern for business leaders. Businesses continue to struggle to find the skills and labour they need to grow and thrive, and the steadily rising economic inactivity rate threatens to exacerbate the situation.

“Persistently high wage growth, despite falls in the rate of inflation, will also be a source of concern to some businesses struggling with high costs across the board.”

“Reversing the trend of increasing economic inactivity should be a priority for government. The ongoing expansion of government-funded childcare is a welcome step, but against the backdrop of tighter immigration rules, more action is urgently needed to increase domestic labour supply.”