Unrelenting workforce pressures hit the economy 

15 August 2023

Wages grew at a record annual pace between April and June, according to new figures from the Office for National Statistics (ONS).

Regular pay grew by 7.8%, the highest annual growth rate since comparable records began in 2001.

Inflation, which measures the pace at which prices are rising, has eased but remains relatively high at 7.9%.

However, there are also signs in the ONS data that the UK employment market is easing. The jobless rate rose from 4% to 4.2%, while the number of people in employment ticked lower.

The number of vacancies in the UK jobs market fell again, down 66,000 between May and July. However, there were still more than one million vacancies.

Jane Gratton, Deputy Director, Public Policy at the British Chambers of Commerce, said:  “Today’s figures showing pay growing at a record annual pace highlight the unrelenting workforce pressures businesses are facing. In a tight labour market, employers are struggling to contain wage inflation as the expectations of their staff and job candidates continue to rise. 

“BCC research published earlier this month, shows only a slight fall in the number of firms facing recruitment difficulties. Businesses tell us that access to skilled workforce remains a major concern.  

“In the current challenging economic climate, boosting productivity is essential, and investment in skills is crucial to making that happen. We need the government to create the right conditions. For example, by reducing upfront business costs, enabling a more flexible apprenticeship levy and ensuring more access to rapid retraining courses.   

“Firms who cannot access urgent skills locally are finding themselves locked out of the immigration system because of escalating costs and disproportionate criteria.  We need urgent reform of the Shortage Occupation List to include more roles at more skill levels, when there is evidence of a national shortage.”