UK's skills gap clouds hopes for stronger economy - report

A worsening skills shortage could blight hopes that Britain can overcome years of dire productivity performance, potentially denting its economic expansion in future, a report suggested on Monday.

Weak productivity has been a big problem for advanced nations since the financial crisis and Britain has struggled more than most, potentially limiting how much workers can expect to earn in the future.

Skill shortages in Britain worsened for a fourth consecutive year, and now rank among the most severe in Europe, according to the annual Global Skills Index from recruitment group Hays (HAYS.L) and consultancy Oxford Economics.

This pushed up wage pressures as employers were forced into a "war for talent" in certain industries like engineering and technology.

While the unemployment rate has fallen to levels last seen before the financial crisis and wage growth has started to recover after years of stagnation, Hays warned the skills gap will create problems unless the government takes action soon.