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Skills focus vital to solve labour market conundrum 

The unemployment rate rose to its highest level for two-and-a-half years, as the rate climbed to 4.4% in the three months to April, according to the latest figures from the Office for National Statistics.

Despite the increase, wage growth remained strong, with earnings continuing to rise faster than prices.

There was another increase in the inactivity rate, with more than a fifth of working-age people deemed not to be actively looking for work.

Regular earnings – which exclude bonuses – rose at an annual pace of 6%, while the number of job vacancies was down by 9,000 to 904,000.

Jane Gratton, Deputy Director of Public Policy at the British Chambers of Commerce (BCC), said: “There are further signs that the labour market is cooling as vacancies continue to fall and unemployment ticks up. However, this has yet to translate into any noticeable weakening of growth in real wages.

“This would suggest that competition for skills is still strong and the substantial cost pressures of wages and interest rates will continue for longer. The rise in the number of economically inactive is also a cause for concern.

“The BCC’s election manifesto is clear that better skills planning is needed across the UK to boost productivity and growth.  We must improve the training of staff, unlock the talent of people who have stopped looking for work and find ways to support the long-term sick back into employment.

“Getting the strong economic growth we all want to see will only be possible when the skills and workplace challenges are resolved.”

More detail on the latest ONS labour market data can be found here.

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