Relentlessly tight labour market stifling business growth

Commenting on the latest ONS Labour Market statistics released today, BCC Head of Research, David Bharier, said: 

“Once again, today’s data confirms that the UK is facing the tightest labour market in years. Our own research shows that labour shortages are holding back the ability of many businesses to service existing customers and grow.

“Despite a further decrease in the number of job vacancies to just under 1.25m, the overall level remains very high. Businesses are currently facing multiple external shocks, from global supply chain disruption, rampant inflation, and rising interest rates. Labour shortages are yet another issue weighing down on business confidence.

“While the unemployment rate of 3.5% stands at the lowest level since 1974, the increasing economic inactivity rate, now standing at 21.7%, should be a cause for concern, with long-term sickness cited by the ONS as a key driver of this. Average weekly earnings also continue to be outstripped by inflation for workers overall.

“If Government is serious about growth, it needs to get serious about jobs. There are key reforms it should adopt to help ease tightness in the labour market. These include supporting greater business investment in workforce training, adopting flexible working practices, expanding the use of apprenticeships, and a comprehensive reform of the Shortage Occupation List to allow sectors facing urgent demand for skills to get what they need.”