IoD – ‘Sharp decline in employment should set alarm bells ringing’


Commenting on this morning’s release of ONS labour market data, Anna Leach, Chief Economist at the Institute of Directors, said:

“Today’s data shows a sharp decline in employment: the number of payrolled employees fell at the fastest pace since November 2020 in December, leaving the overall level on payroll down on the year. Meanwhile the number of unemployment people per vacancy has continued to rise.

“Our data shows that, despite some recovery in December, employer hiring intentions remain around lows reached in 2020. The significant increases in employer NI, the forthcoming increase in the minimum wage and concerns over the cost of employment rights continue to sap demand for workers. With the economy likely to have flatlined over the second half of 2024, the labour market is softening sharply.

“Indications from the government that they are prepared to soften some elements of the Employment Rights Bill are welcome. The important work of reinforcing quality jobs must not squeeze out employment opportunities. A strong growth narrative followed up by swift progress in implementing growth-friendly policies, such as industrial strategy, planning reform and de-regulation, would also go some way to reigniting business confidence and hiring.”