CBI/Pertemps Labour Market Update: January 2024

The latest ONS statistics from October to December 2023 shows a labour market that remains tight overall but continues to slowly soften. This softening is limited to falling vacancies with the employment rate, unemployment rate and economic inactivity broadly unchanged from the last quarter. Vacancies have fallen for the eighteenth consecutive month but are still higher than the pre-pandemic norm.

Growth in regular pay was 6.6% in the quarter to November 2023 – down from 7.2% in the previous period. It is likely to fall again next month but there are signs of a slowing pace rather than a continued acceleration. In real terms, annual growth, real pay rose on the year by 1.4%.

While there continues to be signs that the labour market is softening, it is happening slowly. Many businesses are still struggling to hire the people they need, leading to higher employment costs that are putting pressure on prices. It’s why, with an election fast approaching, the CBI is calling for all parties to look at measures to support business investment as only productivity growth can help to bring down inflationary pressures, create the capacity for sustainable growth and improve living standards.