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Tight labour market problem persists

The number of people looking for work has risen as job vacancies fall – but still remain at 1.1 million, according to the latest figures from the Office for National Statistics (ONS).

About 220,000 more people were seeking work between December and February than in the three months before.

The ONS figures showed that the employment rate edged up to 75.8% in the three months to February. In the same period, the unemployment rate rose to 3.8%, up from 3.7% in the previous three months.

From January to the end of March, the number of vacancies fell by 47,000 from the previous quarter to 1,105,000, although the ONS noted vacancy numbers remained at “very high levels”.

Jane Gratton, Head of People Policy at the British Chambers of Commerce, said: “The Government needs to fix the people problem in the economy if it is to have any hope of boosting growth.

“But despite the latest fall of 47,000 in overall vacancies, the total number is still well over 1m.

“These unfilled jobs are a drag anchor on firms, preventing them from fulfilling orders and taking on new work. People shortages are also, inevitably, feeding into upward pressure on wage demands, as seen by private sector pay growth of 6.9%. This remains a big concern for the Bank of England and a chief reason for the continuing rise in interest rates.

“The Government and employers need to work together to shift the dynamics on vacancies. While employers can do more to make workplaces more accessible and flexible, the Government must quickly put in place its Spring Budget childcare reforms. It also needs to make sure there is enough high-quality supply to meet demand, and that people are supported back into work.

“When firms cannot recruit and train from the local labour market, and where national shortages are crippling sectors of the economy, they must have access to skills and labour from outside the UK. We need a pragmatic approach to immigration policy – that ensures the Shortage Occupations List accurately reflects the reality on the ground.”

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

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