“Many businesses are continuing to tread water. They are hiring, but at a slower pace than any of us would like. The increase in the number of payrolled employees and the small rise in the employment rate, both on the quarter and the year, demonstrates the resilience of businesses and the UK labour market.
“But employers need support if we are to see real growth and an uplift in the economy overall. That calls for investment, rather than cost-cutting. We need government to work with business on strategies that boost productivity, a strong Industrial Strategy that prioritises infrastructure investment and creates jobs, and skills development programmes that meet employer needs.
“The rise in pay is to be expected in an economy that still grapples with skills shortages in key roles, and should not unduly concern the Bank of England or impact interest rates in our opinion. It's also important to avoid jumping to conclusions on pay at this point, as many pay rises typically happen in April at the start of a new tax year, and we have yet to see the true impact of the National Insurance rises that will come into play at the same time."
Kate Shoesmith added:
“It is encouraging to see a halving of the working days lost in December 2024 due to labour disputes across the UK - down to 52,000 days from 108,000 in December 2023. We need to maintain this path as measures from the Employment Rights Bill are introduced – that should be one of the key determinants of regulations brought in. Fewer disruptions support workers as businesses can operate more smoothly, boosting productivity and creating a climate of confidence that supports growth.”
