In its latest labour market overview, the Office for National Statistics (ONS) ONS has reported that in 2023 growth in employment has slowed and the proportion of people economically inactive has increased, with historically high numbers of people reporting that they are long-term sick. (Source: ONS)

Jane Gratton, deputy director of public policy at the British Chambers of Commerce, in response to this latest ONS labour market data, said: "Fewer vacancies show the labour market is softening but firms are still reporting difficulties finding skilled staff and the large number of inactive workers is concerning.

"To grow our economy we need more skilled, engaged, and motivated people to contribute to the workforce in every part of the UK.

Payrolled employees in the UK rose by 31,000 (0.1%) between November and December 2023 and rose by 401,000 (1.3%) between December 2022 and December 2023. While the number of payrolled employees continues to increase, the rate of annual growth is decreasing.

The early estimate of payrolled employees for January 2024 increased by 48,000 (0.2%) during the month and increased by 413,000 (1.4%) on the year to 30.4 million.

The UK employment level for those aged 16 years and over is up both in the year and in the quarter. The UK employment rate (75.0%) for those aged 16 to 64 years remains below estimates a year ago (October to December 2022) but increased in the latest quarter. The UK unemployment rate (3.8%) for those aged 16 years and over decreased in the latest quarter, returning to the rate a year ago (October to December 2022).

There were 108,000 working days lost in December 2023 because of labour disputes across the UK. The health and social work industry showed the most working days lost this month.

Jane Gratton added:  "Government must do more to remove barriers for people who want to work, including access to childcare, public transport, health support and training.

"By offering more flexible workplaces, training and upskilling, employers can make their jobs more accessible to a broader talent pool and help prevent people from leaving the workforce unnecessarily.

"The BCC's own research indicates the labour market remains tight for many. Unless we get more people back into the workplace then the risk of higher inflation and interest rates will persist for longer."