The latest labour market figures have held to the trend of a strong employment rate, while continuing to illustrate a job market characterised by wages that are failing to keep pace with inflation.

In Scotland specifically, although there has been a quarterly decline in employment, the annual employment rate has increased by 1.7 percentage points, joint-second with the South East.

Scotland has also displayed the second highest annual increase in workforce jobs, by 109,000, with only the West Midlands displayed a higher figure.

Liz Cameron, Chief Executive, Scottish Chambers of Commerce said:

“For the seventh consecutive month, today’s figures show that wage growth has failed to outpace inflation, with the CPI rate of 3.1%, further biting into household disposable income.

“Vacancies are also now sitting at a record high across the UK, further emphasising the importance of continued investment into training and workforce skills, and the continued need for business to have access to a migration system that enables firms to recruit from outside of the UK when required.

“Although the Scottish employment market continues to show signs of strength, our focus is now on the upcoming Scottish Budget. It is critical that any measures put forward on Thursday recognise the existing pressures on household spending, and that policies targeted at Scottish business, at minimum, ensure a level footing with the rest of the UK.”

The Scottish Chambers of Commerce welcomes the release of the latest labour market figures, which show that the UK unemployment rate has continued to hold at the lowest level observed since 1975.

Figures for Scotland continue to be positive, with Scotland holding to or exceeding the UK average.

The estimates released today for Scotland provide a more moderate picture of jobs growth as those estimated in the previous labour market figures, but Scotland continues to display the largest increase in the employment rate outside of London.

Liz Cameron, CEO, Scottish Chambers of Commerce said:

“Today’s Labour Market figures continue to illustrate the effects of high inflation, with real wages lagging the inflation rate for several months. As several commentators have observed, there is potential for this wage squeeze to continue, with inflation predicted to peak at 3.1%.

“With inflation continuing to rise, and many industry sectors observing pay growth below 2%, the Bank of England must hold their nerve on interest rates. An increase at this point would damage consumer confidence and spending at a critical period for the retail sector.

“It is essential that the Chancellor recognises these conditions in the upcoming budget. The budget must seek to increase business investment in skills and tackle our productivity gap with a range of measures, ensuring that wages increase and that consumer spending continues to act as one of the UK economy’s key drivers.”

Commenting on the news that Scottish employment rose by 30,000 (1.1%) and unemployment fell by 12,000 (0.5%) in the three months to June, Liz Cameron, Chief Executive, Scottish Chambers of Commerce, said:

“The overall employment figures remain strong, with a new record high employment rate of 75.2% and an unemployment rate of 3.9%. At a time of heightened political and economic uncertainty, the labour market figures are encouraging, showing the commitment and resilience of business to hire and invest in their workforce.

“Although the overall employment rate of 75.2% is the highest since Scottish records began, there are some continued challenges. Strong labour market figures are still not translating into increased productivity or the sort of wage growth that we would normally be seeing with fewer people out of work. This persistent lack of increased productivity and wage growth will add further pressure on consumer demand, business margins and future business investment.

“Additionally, Scotland’s economic inactivity rate remains unchanged from the same period last year, adding further impetus to business and Government to invest in training and upskilling opportunities as a way of encouraging individuals to re-join the workforce. It also reinforces the need for Scottish business to have continued access to a skilled workforce from the EU and beyond as negotiations take shape between the UK and the European Union.”