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Labour Market Continues To Slowly Loosen

23 April 2024

“With the number of vacancies continuing to fall, and unemployment ticking up, there are further signs that the labour market is cooling.  

“But we are certainly not out of the woods yet.   Too many firms are still struggling to find the people and skills they need to fill job vacancies.  At the same time, real wage growth continues to rise, ramping up the cost of employment. All this acts as a brake on activity, profitability and investment.   

“Government and employers need to find ways to bring more people back into the workforce and to train them for our current and emerging skills needs.   As well as investing more in skills, it means removing barriers to work and ensuring job seekers are well prepared to succeed in the workplace.   

“Employers offering fairer and more flexible workplaces are often more successful at attracting and retaining talent in a competitive labour market.   

“However, we are concerned by the growing number of people not looking for work, with a large chunk of those out of action due to long-term health issues.   More must be done to help people with ill health stay in work and to help employers understand how best to support them.      

“Until we get more people permanently back into the workplace then the upside risks of higher inflation and interest rates will remain.”