There is no case for an early cut in interest rates, as labour market approaches full capacity, according to the Chartered Institute of Personnel and Development (CIPD).
The number of people in work has reached a record high and fewer are claiming unemployment-related benefits than at any time in almost 20 years, official figures revealed yesterday.
The employment level rose by 90,000 in the three months to December to 28.52 million – the highest figure since records began in 1971, according to the Office for National Statistics.
CIPD chief economist, John Philpott, said there a serious question mark over the ability of many available jobless people to fill the 650,000 vacancies currently on offer.
“A combination of strong demand for labour and limited effective supply makes the labour market a clear upside risk to inflation,” he said. “Unless and until clear evidence emerges that wage pressures are subsiding, there is no case for an early cut in interest rates.”