EMPLOYEE skill shortages are the largest threat to the UK economy, business leaders say.
A report released by PwC this morning shows that despite a strong desire to hire, two thirds of businesses are concerned about skill shortages.
Some 64 per cent of firms think that problem may hamper their expansion. It polled as the biggest single issue, and with a higher proportion than other western European economies.
Even in the face of capacity problems, 45 per cent of chief executives surveyed expect to increase their workforce. With the US, the UK tied as the country with the highest hiring intentions.
The findings come just a week after the Bank of England’s inflation report, which indicated that there is still considerable slack left in the economy. The results indicate that there is less spare capacity, with firms running into difficulty hiring despite the still-heightened unemployment rate.
Despite the concern over their ability to recruit appropriate workers, chief executives around the world are more optimistic about the economic outlook. This year, 44 per cent say that they expect the economy to improve, more than are confident about their own business prospects. Only 18 per cent said they thought the economy would improve last year.