Commenting on the labour market figures published today by the ONS, David Kern, Chief Economist at the British Chambers of Commerce (BCC), said:

“These figures are broadly positive, and partly reverse the disappointing numbers reported last month. Over the three months to February, employment rose while unemployment and the number of inactive people declined.  

“The figures are welcome, but they should not lead to any complacency. The Government must create the right environment for the private sector to create jobs. As the deficit-cutting programme starts to bite, public sector employment will decline further. Yet interim BCC research* suggests that employers are nervous about recruiting ex-public sector workers. A survey of over 4,000 businesses showed that 40 percent would be fairly nervous or very nervous about hiring employees from the public sector. 

“We are expecting UK unemployment to increase further over the next year, and to peak at around 2.65 million before starting to decline. These figures show that growth in earnings has weakened, particularly in the private sector, and reinforces the case against an early increase in interest rates. Since there is little risk of a wage-price spiral, the MPC should postpone interest rate increases until later in the year when the recovery is more secure.”