“The labour market is continuing to cool but high wage growth is still bearing down heavily on businesses. Our research shows labour costs are the main external pressure on firms forcing them to put up prices and hold back on investment.

“Our latest survey on recruitment, published earlier this week, shows firms across all industries are facing increased difficulties hiring staff. Better skills planning is crucial to tackling these problems, both for individual firms and the wider economy.

“It was encouraging to see a focus on skills in yesterday’s King’s Speech. Plans to create a national skills plan for England, to underpin an industrial strategy, are welcome. Meanwhile, reforming the apprenticeship levy is long overdue.

“Policymakers across the UK need to prioritise helping more people back into work and making sure they have the skills they need to thrive.”