IoD: ‘Jobs boom a silver lining for economy, but can’t last forever’

Responding to the latest official labour market statistics for the UK, showing the unemployment rate stayed at 3.9%, Tej Parikh, Senior Economist at the Institute of Directors, said:

“The labour market remains a silver lining for the economy – but the jobs boom can’t last forever.

“Businesses have continued to recruit despite the ongoing can-kicking on Brexit. Even as record numbers have entered work, vacancies have kept growing, so it has become increasingly challenging to fill new positions.

“The elongated period of uncertainty has kept businesses in a hiring cycle. Many firms have lacked the confidence to put funding toward training, technology, and new machinery, which has in turn meant firms need to hire more workers to lift output.  Without a pick-up in investment, low productivity will also keep wages from growing further, particularly when considering the higher regulatory costs businesses are facing this tax year.

“High employment should not lull policymakers into a false sense of security, business leaders need clarity on Brexit and faster progress on the Government’s skills and productivity agenda.”