New data shows that the reopening of pubs, restaurants and bars last month triggered a surge in the UK job market, but experts say this may mean more staff shortages.
The employment index of accounting and business consulting jobs firm BDO increased by 1.57 points from 106.05 in June to 107.62 in July, the highest level this year.
BDO said that companies continue to report labour jobs shortages, partly due to the pandemic and Brexit, which indicates a strong job market for job seekers.
“The surge in employment is a timely boost and shows how quickly the relaxation of restrictions has impacted the economy,” said Kaley Crossthwaite, partner at BDO.
But this might not bode well for businesses as “one of the biggest problems faced by employers will be filling roles as both the pandemic and Brexit give rise to staff shortages.”
The problem has been exacerbated by the “pingdemic” — employees, even if they have been vaccinated, getting alerts from the NHS COVID app telling them to self-isolate because they have come into contact with someone who has been infected.
This staff shortage “could well lead to a long-term trend of rising wages, which is already a contributory factor in the record-high inflation index figure,” said Crossthwaite.
The BDO stated that the outlook for overall employment levels is still uncertain, and the upcoming cancellation of the permit program in September may bring some instability.
At the same time, the BDO inflation index in July almost stagnated at 103.70, a slight decrease of 0.13 points from the previous month.
But it is the second-highest reading since June 2017. Broader pressures on global supply chains and more specific issues with imports of goods and materials caused by Brexit are driving record inflation levels.
High inflation is affecting the prospects of companies. Despite the relaxation of the blockade in July, the BDO Optimism Index still fell 0.53 points from June to July to reach 111.92 points.
“While this fall does suggest some businesses are fearful about their recovery, business confidence as a whole remains at a relative high — July’s reading represents the second-highest score since the series began in 2005,” the report said.
A separate report found that employers are desperate to attract talent in a tight labour market.
KPMG and the Recruitment and Employment Confederation (REC) stated that their survey of the British labour market found that the company’s wages have increased at a record high. The quarterly report shows that the average starting salary has increased the most in its 24-year history.
Source: Yahoo Finance UK