“Predictions of pay growth increasing alongside strong employment growth is the dog that hasn’t barked for some time now, and we are still yet to see tangible signs of this situation changing in the near term,” said Gerwyn Davies, senior labour market analyst at the CIPD.
Unemployment has fallen to that level and could even dip below it when the latest jobs numbers for June are published this week, but pay growth has still failed to take off.
The robust supply of labour will mean sluggish wage growth will continue, with employers expecting to award pay rises of just 1pc over the next year. That is despite an increase in the proportion of employers expecting to hire more staff over the next year.
As well as more prospective EU workers, employers reported an increase in applications from former benefit claimants moving back into the jobs market, and a surge in the number of “baby boomer” jobseekers aged between 50 and 64. The CIPD cautioned that “future migration trends appear highly uncertain” but said the labour supply was strong.
The Chartered Institute of Personnel and Development (CIPD) said a “buoyant” labour market showed no overall sign of a struggle to recruit workers. Its market outlook found an average of 24 applicants for each low-skilled job. That falls to 19 for every medium-skilled job vacancy and eight for every high-skilled position.