Businesses hesitate to hire in face of rising costs

Commenting on this morning’s release of labour market statistics that showed the first fall in the number of payrolled employees in April 2023 since February 2021 and an increase in unemployment from a low of 3.7% to 3.9% in the three months to March, Kitty Ussher, Chief Economist at the Institute of Directors, said:

“A combination of high costs and cash-strapped consumers is now causing some businesses to hesitate before hiring, uncertain as to what the future holds. As a result, the number of employees has fallen for the first time in over two years, and the unemployment rate is starting to rise from its post-pandemic low.

“But there is also evidence of a skills mismatch, with other organisations finding it hard to recruit the talent they need even as unemployment goes up – there are still 282 thousand more vacancies in the UK than before the pandemic. Government policy needs to work harder to ensure that our education and training system is providing the types of skills that employers are looking for.”