Responding to the latest labour market data published by the ONS this morning, Jane Gratton, Deputy Director of Public Policy at the British Chambers of Commerce said:  

“With businesses feeling the heat from a raft of cost-pressures, a larger easing of average earnings, including bonuses, to 4.6% in June will be welcomed.  

“Continued wage growth is creating real challenges for business and the wider economy. It’s an important factor behind persistent services inflation, as the Bank of England Governor told our conference in June. That’s why employers and the Bank will be watching the path of annual earnings very closely, as further interest rate cuts are considered.  

“It’s also impacting on job opportunities. While unemployment remains fairly stable, we know many businesses have held back on recruitment and others have shed jobs – following the national insurance hike earlier this year.  Labour costs remain the biggest cost pressure for firms, cited by 73% of respondents in our latest survey.  

“There is a limit to how many additional costs businesses can absorb. It’s crucial that there are no more taxes on business in the forthcoming budget.  Whether it’s young people entering the labour market, people looking to return to work, or those wishing to develop in their career – they all rely on thriving businesses.  The government must help, not hinder, businesses to attract and retain the people and skills needed to grow our economy.”