Businesses are still scrambling to hire staff despite experts forecasting the UK will drop into a drawn-out recession at the end of this year, a new survey published today reveals.
Over seven in 10 firms intend to boost staff levels over the next three months, while just over one in 10 employers expect to cut workers, according to Chartered Institute of Personnel and Development (CIPD).
The new figures add to the growing body of evidence illustrating the UK jobs market is in rude health despite the economy wilting under the weight of soaring inflation.
In downturns, firms typically scale back hiring to lower costs in response to a sharp reduction in demand.
However, despite the economy softening, unemployment has stayed low and hiring has remained strong.
The UK economy contracted 0.1 per cent in the second quarter of this year. The Bank of England thinks the country will tumble into the longest recession since the financial crisis from the end of this year.
New figures published this week are expected to show inflation surging to another historic high of 9.8 per cent. The Bank thinks it may top 13 per cent this winter, caused by swelling energy bills.
Workers are reaping the benefits of lower labour market participation forcing employers to hike pay to attract and retain staff.
Private sector workers received a median pay bump of four per cent, the highest rise since the CIPD starting tracking the data in 2012.
Experts have warned a tight labour market may embed high inflation over the long-run if it leads to wage growth that is not matched with productivity gains.
Unions argue workers are long overdue a pay rise after meagre wage growth since the financial crisis.
Jonathan Boys, labour market economist for the CIPD said: “We’re seeing some of the highest pay awards in recent history as employers strive to attract and retain staff. However, strong pay growth can’t last forever.”
Boys warned jobs markets may finally soften once the country tips into recession.
“Forecasts of a recession may dampen employers’ recruitment plans in time, but for now, the UK is still in the grips of a hiring boom,” he added.