Vacancies Still Falling As Wages Outpace Inflation

13th May 2025

Jane Gratton, Deputy Director Public Policy at the British Chambers of Commerce, responds to the latest labour market data, published by the ONS this morning

Responding to the latest labour market data, published by the ONS this morning, Jane Gratton, Deputy Director Public Policy at the British Chambers of Commerce said:? 

“This data suggests some loosening in the jobs market with vacancies staying below pre-pandemic levels and unemployment nudging up, but wage growth including bonuses remains strong.?? 

“Although the pace of salary increases has slowed, they are still significantly above inflation. The rising cost of employment is a major challenge for employers. Our research has been clear that business sentiment has dropped due to the National Insurance (NI) increase and other changes to employment policy.

“The situation is likely to get worse for employers in the months ahead. Although vacancies are now more than half a million below their pandemic peak, firms tell us recruitment remains a huge challenge.  They are still struggling to find people with the skills they need, which is continuing to drive wage growth and feed into inflation. 

“In some cases, access to global talent remains the only solution to address urgent skills shortages, when firms have tried all they can to recruit and train people from the local labour market – and that option has become even more expensive. 

“Business and government both want to fill job vacancies with UK talent and to train and upskill our workforce.  To achieve this, government must double-down on plans to boost technical and vocational skills and help more people back into work. That means easing the cost pressures on business to give them more freedom to invest in their workforce.?? 

“The £5bn plus cost associated with changes to employment rights also looms large in the background. While government is consulting business, the legislation as it stands threatens to add even more to their employment bills.”?