“We need to avoid artificially driving inflation with price rises, when interest rates should be starting to fall. Businesses have set out to us and the government their concerns over their ability to continue to operate if there are further substantial increases to their cost base in the short-term – and very little on the horizon that points towards growth.
“It’s the cumulative impact that is bothering employers most. The level of these new pay rises, following two previous years of substantial increases to national minimum wage, plus other ongoing cost pressures, in a tough market, with an increase in National Insurance Contributions expected in the Budget tomorrow, and big regulatory changes afoot via the Employment Rights Bill – that’s what businesses are weighing up. Employers want to ensure their teams get the pay they deserve but many will also be thinking about how they balance that out. That might mean offering workers fewer hours, or not hiring for a vacancy for a while, or putting up prices to consumers. The government promised to prioritise growth – it’s really needed if employers are to manage their way through these changes.”
