The Institute of Directors has said the latest employment and wage statistics released today, which showed the headline rate of unemployment steady at 5.6 per cent, the number of people in work fall slightly and wages growing at 2.4 per cent, represents a new phase of the recovery.
Michael Martins, Economic Analyst at the Institute of Directors, 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. The slight decrease in the overall number of people in work is a natural part of this transition from a fragile recovery to a strong, growing economy. It should not be a cause for alarm.
“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 to 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.”