IoD: ‘Robust labour market an ‘anchor’ amid turbulence’

Responding to latest official labour market statistics for the UK, showing there were 396,000 more people in work compared with a year earlier, Tej Parikh, Senior Economist at the Institute of Directors, said:

“The robust labour market continues to be an anchor for the British economy in a period of turbulence, but there is little room for complacency.

“Businesses have been taking on staff and opening new positions at a commendable pace, and are raising pay where they can in order to attract the best talent. The growth in jobs has in turn kept production and household incomes relatively buoyant in the face of Brexit uncertainty.

“But the need to bolster skills is intensifying and the potential for even stronger wage growth remains tethered by weak productivity growth.

“Unfortunately, progress on these essential pillars of the Industrial Strategy has been slow off the mark. Without concerted attention from policymakers skills shortages and unspectacular rises in pay risk becoming an even greater sticking point for the economy down the line.

“The Bank of England will be largely unperturbed by today’s data and will likely leave interest rates unchanged at its meeting next week with recent political developments further obscuring the economic outlook.