Unemployment rates remain low but the labour market is still tight, according to the latest figures from the Office for National Statistics (ONS).
The data also revealed wages had risen at their fastest rate for 20 years, fuelling fears the UK interest rate would rise again.
Jane Gratton, Head of People Policy at the British Chambers of Commerce, said: “While it is positive to see unemployment remaining low, the labour market continues to be incredibly tight, bringing with it additional problems and costs for employers.
“Staff shortages continue to damage productivity, with many firms struggling to fulfil their order books and turning away new business. Fierce competition for skills, wage demands and candidates’ expectations leave many businesses with job vacancies they can’t fill. Together with broader inflationary pressures, it’s a perilous environment for business.
“The Government must support more people back into work and create the right conditions for employers to invest in staff training and development. Where firms cannot recruit and train from their local or national labour market, a flexible, efficient and affordable immigration system is crucial.”