Ann Frances Cooney, employment partner at DWF, has commented: “The cooling of the labour market is perhaps to be expected against a backdrop of a difficult economic climate. The headline figures show that unemployment in Scotland was 4.7%, up 0.4% over the quarter.

“By way of comparison, Scotland’s unemployment rate was above the UK rate of 4.4%. The employment rate in Scotland was 73.1%, down 1.3% over the quarter. Scotland’s employment rate was below the UK rate of 74.3%.”

Ms Frances Cooney noted HMRC data indicates a rise in median monthly pay for payrolled employees, reaching £2,411 in May 2024, a 5.8% increase compared to the previous year. This growth surpasses the UK average, highlighting the ongoing competition for talent.

She added: “Employees have consistently demonstrated that they are prepared to move jobs for higher salaries. Employers are doing their best to stem the flow of lost talent by increasing pay where they can.”

“With the General Election less than a month away, we can expect further change in the labour market. With opinion polls predicting a change in government, employers are likely to act with a degree of caution when recruiting – particularly with unfair dismissal set to be a day one right should Labour win the election.

“Labour has pledged to bring in a raft of enhanced and new employment protections. With political uncertainty and change on the horizon we may well see the labour market slow whilst employers adapt to the changes.”