Responding to latest official labour market statistics, showing the unemployment rate remained unchanged from the previous quarter at 3.8%, Tej Parikh, Chief Economist at the Institute of Directors, said:
“The UK’s jobs boom continues to be a big plus point for the economy, but it is slowly losing momentum.
“Businesses have shown a strong appetite to take on staff in recent years, and climbing employment levels have boosted household incomes, adding buoyancy to the economy. However, firms are now cutting back on new hires as it becomes harder to find the skills they need. Uncertainty and slowing global growth have also made businesses a bit more cautious in their recruitment plans, and vacancies are expected to continue falling into 2020.
“As demand for new workers has slowed, it is also inevitable that wage growth has also decelerated a little recently. Many smaller firms have been struggling under the weight of high costs and regulations, which has restrained their ability to push pay packets even higher.
“With some strains now appearing in the labour market, the new Government must push ahead with its plans to revamp the UK’s skills system, while initiatives to drive up business productivity should also support stronger wage growth. Businesses are eager for the details behind flagship policies like the National Skills Fund and reform to the Apprenticeship Levy.”