IoD: Labour market cools, yet skills shortages persist for businesses

Commenting on this morning’s release of labour market statistics that showed a slowing of annual wage growth and a drop in the number of vacancies in the three months to February 2024, Alexandra Hall-Chen, Principal Policy Advisor for Employment at the Institute of Directors, said:

“Despite a further small decrease, the number of vacancies remains above pre-pandemic levels and many businesses are still struggling to access the skills they need.

“The slight fall in economic inactivity over the past month is welcome, but the inactivity rate remains higher than both the previous quarter and the same period a year ago. With little in the recent Budget by way of measures to increase the domestic labour supply, government should focus on delivering on its promised expansion to childcare provision. A future government should place tackling skills shortages and increasing labour force participation at the centre of its growth plan.

“The continued easing of wage growth is a positive development which supports the case for the Bank of England to cut interest rates, a step which would bolster companies’ confidence to invest.”