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The relaxation of further lockdown in rules in July caused the UK’s job market to surge, according to the latest business trends report from accountancy and business advisory firm BDO.
The BDO Employment Index jumped 1.57 points from 106.05 in June to 107.62 in July, the highest level seen so far this year.
The firm claims that this has largely been driven by the hospitality industry, prompted by the widespread re-opening of pubs, bars and restaurants.
Elsewhere in the report, the BDO Inflation Index remained largely stagnant in July at 103.70, a slight fall of 0.13 points from last month. This still represents the second highest reading since June 2017.
It says the record high levels of inflation are being driven by broader pressure on global supply chains as well as more specific problems importing goods and materials due to Brexit. It adds that manufacturers have borne the brunt of this.
BDO now warns that this strong inflation could derail the recovery as the BDO Inflation Index remains at the second highest level in four years.
Kaley Crossthwaite, partner at BDO, 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.
“This could well lead to a long-term trend of rising wages, which is already a contributory factor in the record high inflation index figure. Combined with a material shortage caused by pandemic disruption, and ongoing disruption at the border because of Brexit, businesses are not yet out of the woods.”
