Still more UK jobs than there are jobless

The number of job vacancies in the UK declined marginally in August for the second month in a row, although the total of openings still exceeded the number of people registered as unemployed.

Close up of help wanted sign during a job interview in the office with people in the background.
The official data from the Office for National Statistics prompted renewed calls from the British Chambers of Commerce (BCC) to ease visa restrictions, while the Institute of Directors (IoD) described continuing skills shortages as "a very real concern" to businesses.
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Vacancy rate still at record high despite fall

With an unemployment rate now falling to 3.6 per cent - the lowest since 1974 - the jobless total of 1.2 million remained lower than the 1.25 million vacancies recorded by the ONS.One reason for the low unemployment rate was an increase to 21.7 per cent in the number of people no longer looking for work - the highest inactivity rate in five years.Meanwhile, the number of job vacancies fell by 34,000 between June and August, although the total remained at an historical high.James Reed, Chairman of recruitment company Reed, told BBC Radio 4's Today programme: "There are still very large numbers of vacancies and people are still advertising a lot of jobs, and that's why we've seen unemployment continue to go down."The question is, what happens next? Will there be a jobs slump? That's a concern clearly but our data at the moment doesn't suggest that, because we've still got a large number of vacancies and a lot of employers are still struggling to recruit."

Calls to relax immigration policy continue

Jane Gratton, Head of People Policy at the BCC, said that at a time when firms were struggling with spiralling costs, the tight labour market was further restricting their ability to invest and grow.“Despite a second month of a decrease in job vacancies, the overall number of vacancies in the labour market remains high. With over 1.2 million unfilled jobs across the country, labour shortages have reached crisis levels for businesses across many sectors and regions," she said.Ms Gratton called on the Government to liberalise the immigration system's Shortage Occupation List (SOL) to make it easier for companies to hire from overseas the talent in such short supply in the UK. “The SOL must also be reformed to include more jobs at more skill levels, to give firms breathing space to train and upskill their workforce,” she said.“During a period of increasing inflation, and a stagnant economy, we cannot afford to let recruitment problems further dampen growth."

Growth impacted by skills shortages and unemployment

Kitty Ussher, Chief Economist at the Institute of Directors, described the fall in the unemployment rate as "extraordinary", adding: "More disturbing is the continuing rise in economic inactivity. Some of this is due to having more students, but also to increasing numbers of over-50s being denied the ability to work due to long-term illness.“For businesses, low unemployment means labour shortages remain a very real concern. Having said that, today’s data also suggests some firms are pausing recruitment plans in the face of a weakening economy: the number of vacancies, although still very high, has started to come down.”Tony Wilson, Director of the Institute for Employment Studies, also warned of the economic damage that labour shortages were doing."There are still more than half a million more people out of work than there were before the pandemic began and firms simply can't find the workers to fill their jobs," he said."This is holding back growth but also pushing up inflation, with pay growth in the private sector now running above six per cent and contributing to even higher prices. Of course, inflation is even higher still, which combined with anaemic public sector pay means that earnings in real terms have fallen for the ninth month in a row."

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