The latest Office for National Statistics labour market data has revealed another rise in the number of UK workers on payrolls, up by 35,000 between February and March to 29.6 million.
But this was the smallest monthly increase since February last year while vacancies also saw the smallest rise since February to April 2021, up 50,200 at a record 1.29 million in January to March.
The latest data from the ONS also comes ahead of April’s energy cap rise, Council Tax bills increase and the National Insurance contribution rise.
British Chambers of Commerce Head of Economics, Suren Thiru, said: “While payroll employment rose slightly and the unemployment rate continues to fall, the headline figures continued to be flattered by significant underlying factors, including a shrinking workforce.
“Increasing vacancies highlights the historic hiring crunch facing firms. With rising economic inactivity confirming that lots of workers have seemingly quit the jobs market completely, severe staff shortages may remain a persistent drag anchor on economic activity.
“Although there was a rise in earnings growth, with inflation soaring, wages are still comfortably lagging behind price increases. If this continues as expected, real household incomes will be damaged further, stifling consumer spending, a key driver of UK economic output.
“Weakening consumer confidence may limit households’ willingness to support spending by running down savings built-up during Covid to offset declines in real pay.
“The deteriorating economic outlook and the financial squeeze on businesses from soaring energy bills and the national insurance rise risks weakening labour market conditions by dampening recruitment and limiting firms’ ability to increase wages and invest in their staff.
“More must be done to help people access rapid retraining opportunities for in-demand jobs, including assisting older workers to turn to more sustainable jobs. Introducing a new skills tax credit to incentivise employers to invest in training for workers would help to revitalise employer-led training.”