Inflation past its peak
The cost-of-living squeeze is still being felt but inflation is now on a downward trajectory. EY expects it to fall to 2.0% by 2025 as lower wholesale energy prices feed through to households’ bills and firms’ production costs, and as tighter monetary policy feeds through to the real economy. That said, the process could prove bumpy.
Demand for workers is strong but supply is scarce
Employment has been rising and unemployment rates are in and around historic lows in both ROI and NI, meaning the labour market is tight. This has implications for employers, employees, and the economy.
For employers, it makes for reduced choice and greater difficulty in filling vacancies. However, there are ways to attract and retain the best talent, including offering flexibility, upskilling, and investing in new and existing workers. Organisations should also think outside the box and look to harness untapped labour potential.
For employees, it brings more opportunities and greater bargaining power. The pandemic has prompted a reassessment of priorities, with many people desiring greater flexibility in how, when, and where they work.
For the economy, it gives rise to risks. With available resources being rapidly used up and with some compensation for recent inflation, wage increases are on the cards. However, if a wage-price spiral were to occur, cost competitiveness would be damaged.