The latest ONS labour market data shows a decline of 135,000 payrolled employees over the past year and a 36th consecutive quarterly drop in job vacancies.

Unemployment has risen to 4.7%, though the employment rate remains higher than last year. Meanwhile, average earnings continue to outpace inflation, increasing cost pressures on businesses.

Commenting on the latest figures Chris Plant, Deputy CEO of Staffordshire Chambers of Commerce, said: “The data indicates the labour market is starting to loosen, with unemployment edging up and job vacancies declining once more.

“Yet, pay increases continue to outstrip inflation, which means businesses across Staffordshire are still facing significant upward pressure on employment costs, putting strain on their profit margins.

“The recent sharp rises in national insurance contributions and the national living wage are key contributors to these challenges. Our members frequently highlight ongoing recruitment difficulties, with labour costs identified as the most pressing concern.

“Additionally, the announced review of pension auto-enrolment contributions is likely to add further financial strain for employers. Combined with persistent skills shortages, these escalating costs pose serious obstacles to business investment and productivity within the region.

“The proposed Employment Rights Bill, with its estimated £5 billion cost, also threatens to hinder investment plans for many companies. Without amendments, this legislation will increase employer expenses at a time when businesses are already under considerable pressure.

“The Staffordshire Chambers of Commerce, in line with the British Chambers’ Blueprint for Growth, calls for actionable policies to address these issues, including enhancements to apprenticeships and greater focus on workplace health initiatives. These steps are essential for stabilising the labour market and supporting sustainable growth.

“Local businesses also require clear progress on the government’s economic agenda, advancements in international trade negotiations, and a freeze on additional tax increases to help rebuild confidence and encourage investment.”