EMPLOYMENT and average wages have continued to grow but concerns remain over skills shortages and workers’ ability to keep up with price inflation.

Robust headline data masks several areas of concern, including earnings growth.

Average earnings rose 2.6 per cent in the year to July, above the rate of inflation, which was last logged at 2.5 per cent.

While there was a welcome increase in earnings growth, the gap between pay and price growth remains insufficient to convert into an appreciable pick-up in consumer spending.

Sustaining meaningful real wage growth is likely to remain challenging amid subdued productivity and the escalating burden of upfront costs on businesses.

Job vacancies, which reached a record high of 833,000, were “alarmingly high” and there is further evidence of skills shortages.

While the number of people in work stands close to historic highs, firms continue to report that attempting to recruit staff with the right skills is an increasingly uphill struggle, which is stifling their ability to grow and boost productivity.

It is vital that more is done to support those businesses looking to recruit and train staff, including delivering an open and flexible immigration system to help firms attract and retain the people they need to compete on the global stage.

Suren Thiru is head of economics at the British Chambers of Commerce, which sits at the heart of a network of businesses in the UK