24 August 2015 11:45
Job figures show "UK has entered new stage of recovery" say IoD
The Institute of Directors (IoD) has described recent employment and wage statistics as a "new stage of the recovery", with the headline rate of unemployment steady at 5.6%, the number of people in work falling slightly and wages growing at a rate of 2.4%.
Michael Martins, IoD Economic Analyst, said:
"Britain has entered a new stage in the recovery, with job security on the rise and wages continuing to grow ahead of inflation. After years when preserving – and then creating – jobs was the main priority, businesses are now rewarding employees, who cut down on hours or accepted pay freezes, with extra work and higher wages."
He described the slight decrease in the overall number of people in work as "a natural part of the transition from a fragile recovery to a strong, growing economy", saying it should not be a cause for alarm.
Martins added: "Business and consumer confidence is high, meaning more people are switching from part-time to full-time work, fewer people have to work on temporary contracts or take up second jobs, and the number of job-seekers is also down. Moreover, the overwhelming majority of people who left employment were over 65, showing they now feel confident and secure enough to retire.
"Confidence should remain high for the foreseeable future, with 'lowflation', strong growth and a tightening labour market on the horizon. As wages continue to grow and interest rates look likely to rise before long, the next crucial test for the UK economy will be to translate growth and confidence into productivity gains. The signs are encouraging here, too, as figures suggest output per hour could be growing at its fastest rate for a number of years."
Recently, the CBI responded to Office for National Statistics labour market data for the three months to June 2015, which showed that unemployment rose by 25,000 and employment fell by 63,000 to 31m.
John Cridland, CBI Director-General, said:
"It's disappointing to see employment falling, caused by a drop in the number of people working part-time. And while the overall pace of pay growth has remained steady, it has reduced slightly in the private sector, where growth in regular pay has slowed and bonus payments have fallen.
"With the new National Living Wage forcing pay rises from early next year, the government will need to keep a close eye on employment figures, to ensure it minimises the negative effect of locking some people out of work."