Some 21.5% of working age adults in the UK are out of work and not actively looking for work according to the latest figures from the Office for National Statistics.
Pay growth continued to outpace inflation, growing by 2.2% in real terms. Redundancies rose for the first time in a year to 124,000 in the three months to January.
Jane Gratton, Deputy Director Public Policy at the British Chambers of Commerce said: “The labour market remains a significant challenge for employers who are struggling with skills shortages, higher wage costs and the imminent hike in employment taxes.
“While the rise in average earnings is slowing, it continues to add huge cost pressures to business, underlining the competition between firms to attract and retain the right talent.
“All this is forcing firms to rethink recruitment and staffing plans. Unemployment is currently stable, but our latest research suggests this is likely to change in the months ahead. Firms will need time to plan and adapt to the imminent impact of the NICs increase in particular. The full impact may not be seen until later in the year.
“The Government must act now to minimise costs for businesses and tackle the ongoing skills crisis – giving firms the tools they need to invest, recruit and grow.
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