Yael Selfin, Chief Economist at KPMG UK says that further tightening in labour market increases pressure on businesses ahead of Brexit.
“Further tightening in labour market increases pressure on businesses ahead of Brexit” says Yael Selfin, Chief Economist at KPMG UK:
“With businesses across the country already citing shortage of labour and skills as one of their main concerns, today’s figures, which point at further tightness in the labour market, will make things harder. While the Brexit impasse has caused many investment plans to be put on hold, the lack of available staff will make it particularly difficult to meet any short-term increase in demand and put significant downward pressure on growth.
“Stronger real earnings, now back to pre-EU referendum levels, should support households’ spending in these uncertain times. However, the Bank of England will be concerned that dwindling spare capacity could see inflation accelerate this year, although the MPC is unlikely to raise rates during the new extension period.
”Figures today make it ever clearer that businesses need to invest more in labour saving processes, as well as upskill staff, in order to thrive. Raising labour productivity this way will not only raise UK’s growth potential but will also support higher income for a larger proportion of UK households.”