Reacting to the latest ONS labour market figures, Jane Gratton, Head of People Policy at the British Chambers of Commerce, said:

“Despite unemployment remaining low, we hope that today’s 0.2 percentage point increase is a blip rather than a sign of a deeper trend. We remain concerned about the persistent tightness in the labour market, adding to the costs and difficulties facing businesses.

“Staff shortages continue to damage growth and business activity. Our research shows that three quarters of firms (73%) are facing skills shortages, and in some cases, this means turning away new business.

“Fierce competition for skills, wage demands and candidates’ expectations leave many businesses with job vacancies they can’t fill. All of this, on top of rising interest rates, and stubbornly high inflation, makes it a perilous environment for business.

“The Government must support more people back into work and create the right conditions for employers to invest in staff training and development, which takes time.

“Firms need action now to fix the short-term issues they face in staff recruitment and retention. If employers cannot recruit and train from their local or national labour market, a flexible, efficient and affordable immigration system is crucial and must be a priority to stop wage inflation and get the UK back to healthy growth.”

Paul Butterworth, CEO, at Chambers Wales South East, South West and Mid, said: 

“While the latest figures show that unemployment remains low, the tightness of the labour market is still a concern for the economy. 

“Recruitment, particularly for skilled roles, remains a persistent issue for many. 71% of businesses in Wales experienced difficulties in recruiting suitable staff in Q2 of 2023.  

“Although our recent quarterly economic survey revealed that Welsh businesses were optimistic about the future, ongoing staff and skill shortages could hamper business activity and growth plans. 73% of businesses in Wales told us they were under pressure to raise prices of their goods or services in Q2 of 2023 because of labour costs such as salary demands and expectations.  

“More targeted action is needed to create the right conditions for businesses to invest in skills, training and development to attract and retain employees.”