The reopening of the hotel industry leads to a wave of hires in a hot job market

The rise in employment shows how quickly the easing of restrictions has impacted the economy, an expert said. Photo: Getty

The reopening of pubs, restaurants and bars led to an increase in the UK labor market last month, new data has revealed, but experts say it could mean more staff shortages.

The employment index of accounting and business consulting firm BDO jumped 1.57 points, from 106.05 in June to 107.62 in July, the highest level seen so far This year.

BDO said companies continue to report labor shortages, in part caused by the pandemic and Brexit, suggesting there is a strong job market for job seekers.

“The strong increase in employment is a welcome boost and shows how quickly the easing of restrictions has impacted the economy,” said Kaley Crossthwaite, partner at BDO.

But that may not bode well for companies as “one of the biggest problems employers face will be filling roles, as the pandemic and Brexit lead to staff shortages”.

The problem has been exacerbated by the ‘pingemia’ – employees, even though they have been vaccinated, receive alerts from the NHS COVID app telling them to self-isolate because they have come into contact with an infected person.

This staff shortage “may well lead to a long-term upward trend in wages, which is already a contributing factor in the record inflation index figure,” Crossthwaite said.

The outlook for overall employment levels remains uncertain, BDO said, with the upcoming withdrawal from the leave scheme in September likely bringing some instability.

Read more: ‘Right time to look for a new job’ as UK starting wages rise

Meanwhile, the BDO inflation index remained largely flat in July at 103.70, a slight decline of 0.13 points from last month.

But it represents the second highest value since June 2017. The record levels of inflation are due to wider pressure on global supply chains as well as more specific problems of importing goods and materials in China. because of Brexit.

The high level of inflation has an impact on the outlook for companies. Despite the loosening of the lockdown in July, BDO’s optimism index fell 0.53 points from June to July, reaching 111.92 points.

“Although this fall suggests some companies fear their recovery, overall business confidence remains at a relatively high level – the July reading represents the second highest score since the series began in 2005,” the report.

A separate report found that employers are desperate to attract talent in a tight labor market.

KPMG and the Confederation for Recruitment and Employment (REC) said their survey of the UK labor market found companies were raising wages to record levels. Average starting salaries have increased the most in 24 years of history, according to the quarterly report.

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