IoD – Wage costs remain very acute for businesses

Commenting on this morning’s release of labour market statistics that showed annual wage inflation (excluding bonuses) continuing to run at its record high level of 7.3% in the three months to May, Kitty Ussher, Chief Economist at the Institute of Directors, said:

“Wage costs remain very acute for employers across all sectors of the economy as businesses struggle to find the talent they need in a market that still has over two hundred thousand more vacancies than before the pandemic.

“However, there are also some hopeful signs, with the number of vacancies falling and more people coming out of inactivity back into the labour market.

“There is also a suggestion that recent interest rate rises are starting to feed through, with a reduction in payrolled employees and a slight increase in the historically low rate of unemployment.”