A report by professional services group BDO reveals that despite July relaxation of lockdown rules, staff shortages caused by the pandemic and Brexit may still undermine economic recovery. The agency’s recent most business trends report found that the jobs market strengthened last month, as bars and restaurants were allowed to reopen without capacity limits.
However, BDO said that several firms reported labour shortages, partly due to the pandemic, and with the NHS asking workers to self-isolate. The BDO’s employment index rose by 1.57 points, from 106.05 in June to 107.62 in July, showing the strongest pickup in hiring yet. BDO reported that pressure on global supply chains, and problems of importing goods and materials due to the UK’s exit from the EU, both pushed up costs, long with rising wages as employers paid more to attract and retain talent.
Last week, the Bank of England predicted that unemployment has peaked, with a tight labour market leaving some employers struggling to hire staff. The BoE also forecast that inflation would hit a 10-year high of four per cent by the end of the year.
Kaley Crossthwaite, partner at BDO LLP, said, “The surge in employment is a timely boost and shows how quickly the relaxation of restrictions has impacted the economy. It now appears that one of the biggest problems faced by employers will be filling roles as both the pandemic and Brexit give rise to staff shortages.
Meanwhile, a survey from accountancy firm Azets found that two-thirds of UK's small businesses felt positive about the economic outlook over the next 12 months. It also found a regional split, with 71 per cent of London and south-east small firms feeling positive about the UK’s economic outlook, in comparison with 60 per cent in Scotland and 59 per cent in the north-east, north-west, and Yorkshire and Humberside.
