High employment combined with a weak economy 'to blame for wage stagnation'

Following a report issued yesterday (January 23rd) by the Office for National Statistics (ONS) regarding labour market figures, promising levels of employment against a backdrop of a weak economy have been partially blamed for wages not keeping up with inflation.

Nida Ali, economic advisor to the Ernst & Young ITEM Club, said: "Weak earnings growth continues to be the trade-off for higher employment," as companies hold onto employees in the hope of an upturn in economic prospects.

In light of the ONS figures having shown that unemployment levels have fallen by 37,000, Ms Ali added that improving the economy is now essential to enable companies not only to boost earnings but also to support more full-time employment.

This will in turn have a further positive knock-on effect on the UK economy.

Bernard Brown, partner and head of business services at KPMG, believes that investment in the capabilities of employees is key for UK plc to "keep moving in the right direction".

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Posted by Richard Esquilant

Source: The Sales Director News