MNI BRIEF: UK Companies Struggling With Labour Shortages - CBI

Labour shortages continued to be a strain on UK businesses in the last 12 months, a Confederation of British Industry survey shows, with more than 70% of respondents reporting problems hiring staff.

Nearly eight in 10 companies responding believe access to skills has been a threat to competitiveness over the last year, the CBI's latest annual Employment Trends Survey -- conducted with Pertemps Network Group -- showed. Labour shortages are having a material impact on firms’ ability to invest, respond to demand and to grow, with many now turning to upskilling the current workforce and investing in technology and automation to improve productivity and reduce reliance on labour.

The findings will come as no surprise to policymakers at the Bank of England, which has long seen labour market tightness as a leading factor behind the sticky core inflation. (MNI INTERVIEW: BOE Likely To Revise Up View Of Wage Growth). However, recent survey data, including this week’s REC/KPMG Report On Jobs, suggest the labour market is easing, with people returning to the labour force, and that salary growth is slowing.