Ongoing worker shortages loom over UK economy

Endemic worker shortages putting the UK economy in a vice are set to persist for months to come.

Businesses’ demand for workers jumped three percentage points to 25 per cent, according to data from the Recruitment and Employment Confederation (REC).

Hiring intentions over the next four to 12 months also strengthened to 30 per cent.

A paucity of lorry drivers has led to supply chain snarl ups, causing shop shelves to lie empty and delivery times to sharply lengthen.

A smaller pool of HGV drivers has restricted fuel from being transported around the UK, resulting in petrol station operators closing forecourts. Queues of motorists piling up outside petrol stations have been seen across the country. 

“With demand for staff remaining high, the current labour shortages look set to continue for some time,” the REC warned.

The number of job vacancies in August this year topped 1m for the first time on record, according to the Office for National Statistics (ONS). Businesses have hiked pay in a bid to attract talent, which is putting pressure on margins and intensifying inflationary pressures.

The government has announced 5,000 and 5,500 temporary visas for HGV drivers and poultry workers respectively in a bid to tackle staff shortages. The Road Haulage Association estimates the UK has around a 100,000 HGV driver deficit.

Neil Carberry, chief executive of the REC, said: “Driving is not the only sector being severely affected by labour shortages.”

“We’d like to see a collaborative approach going forward, with government departments and industry experts coming together in a joint forum to try and resolve this crisis.”

Experts and the Bank of England have suggested the end of the furlough scheme this Thursday will help ease worker shortages as staff return to the jobs market.