Responding to latest official labour market figures, showing the employment rate fell slightly to 76%, Tej Parikh, Chief Economist at the Institute of Directors, said:

“The UK jobs market remains a source of resilience for the UK economy, but it is showing more signs of strain.

“With so many in work there has been a lift to household incomes, which has supported the economy through a challenging period. However, businesses are now finding it harder to access the talent needed to fill openings, so jobs growth is expected to slow further. Many firms are also putting recruitment plans on ice as wider projects and investments are bottled up by uncertainty. Vacancies are likely to continue falling.

“The pick-up in wage growth earlier this year has been a plus, but there is clearly a limit to how high pay packets can go. With many firms facing elevated costs and difficulties raising their productivity game, the margins to raise pay are eroding. A further acceleration in wages now looks unlikely.”