New Office for National Statistics figures showing the pace at which wages are rising indicate tough times for business, according to Jane Gratton, Deputy Director of Public Policy at the British Chambers of Commerce.
She says it will be a concern for businesses continuing to grapple with the increase in employment costs announced in the autumn Budget. The unemployment rate remains unchanged, showing ongoing challenges in the labour market.
She said: “Higher employer National Insurance Contributions and an increase in the national living wage from next April mean firms are facing difficult decisions. Many say they will have to raise prices, put recruitment and investment plans on hold and look for other ways to reduce their costs.
“Although the level of vacancies in the economy is now fast approaching the pre-pandemic level, this does not mean the recruitment crisis is over. Our latest research shows that over three quarters of SMEs are still struggling to find staff with the skills they need.
“With firms reconsidering their recruitment plans due to rising employment costs, there is a risk this could impact the labour market in the months ahead. But it is crucial the Government continues to take action to tackle the skills crisis, boost workforce health and ease economic inactivity.”
