The latest UK jobs numbers show employment up by 174,000 jobs and unemployment falling to 1.63 million, down by 39,000 from the previous period, with the unemployment rate stable at 4.9%. Wage growth has slowed slightly – with average earnings, including bonuses, up by 2.3%, a 0.1% slower rate of growth compared to the previous period.
Yesterday’s figures suggest that, as indicated by the latest FSB research, small firms have been resilient, managing to absorb the initial costs of the new National Living Wage without cutting employment or passing on the costs to the consumer. FSB’s data found the majority of small businesses (59%) absorbed the additional costs by lowering profits and making other efficiencies.
The data also suggests that since the UK’s vote to leave the EU, businesses have decided to take a “business as usual” approach to hiring for the time being.
Mike Cherry, national chairman of the Federation of Small Businesses (FSB), said: “Small employers have stretched to meet the challenge set by the National Living Wage, with many paying their staff more by reducing operating margins. This will get harder for many firms in later years, with the targets set in a ‘pre-Brexit-decision’ economy.
“Negotiating a Brexit which works for smaller businesses is critical, but we must not forget the many ongoing domestic economic issues which must be tackled by the new Government. The upcoming Autumn Statement will be an important moment if we are to boost economic growth and sustain a robust jobs market”.