Commenting on the release of labour market statistics that showed unemployment falling on the quarter to 3.6% in the 3 months to July 2022, Kitty Ussher, Chief Economist at the Institute of Directors, said:

“Just when we thought unemployment couldn’t get any lower, it has fallen further to an extraordinary 3.6% in the 3 months to July, the lowest rate since 1974.

“This is good news for households trying to budget in the face of rising costs. Although the effect of inflation has caused real pay to fall – by 2.8% on the year, causing difficulties for many – the jolt to family budgets from high unemployment would be significantly worse.

“More disturbing is the continuing rise in economic inactivity. Some of this is due to having more students, but also to increasing numbers of over-50s being denied the ability to work due to long-term illness.

“For businesses, low unemployment means labour shortages remain a very real concern. Having said that, today’s data also suggests some firms are pausing recruitment plans in the face of a weakening economy: the number of vacancies, although still very high, has started to come down.”