National business trade bodies and financial analysts have called on the government to take urgent action on high commercial energy bills and rising employment costs, as official figures show a cooling labour market alongside persistent wage growth.

The intervention follows the latest Office for National Statistics (ONS) data, which revealed that payrolled employee numbers fell by 0.1 per cent and vacancies dropped by 0.9 per cent over the quarter.

The Confederation of British Industry (CBI) welcomed the appointment of Jonathan Reynolds as Secretary of State for Business, Innovation, Science and Trade, but warned that commercial energy prices in the UK remain among the highest in the developed world, stifling private sector investment.

Louise Hellem, CBI Chief Economist, said: "Congratulations to Jonathan Reynolds on his appointment as Secretary of State for Business, Innovation, Science and Trade. Having previously served in the role, he brings a clear understanding of the challenges facing business and will be able to hit the ground running – particularly when it comes to delivering the Industrial Strategy launched during his previous tenure.

"Following the announcement of help for household energy bills, firms will be looking for the government to take equivalent action on business energy costs – which remain among the highest in the developed world and continue to hold back investment and growth.

“From fixing the burden of energy and employment costs to helping employers provide opportunity through work and training, we look forward to working with the new Business Secretary to help unlock private sector investment, drive growth and boost prosperity across the UK economy.”

Meanwhile, the Institute of Directors (IoD) warned that weakening labour demand is the direct result of cumulative policy decisions that have made recruitment riskier and more expensive for firms.

Alex Hall-Chen, Principal Policy Advisor for Employment at the Institute of Directors, said: "Today's data points to a stagnant and weak labour market, with the number of payrolled employees down 0.1% and job vacancies down 0.9% on the quarter.

"This ongoing decline in employer demand for labour is not inevitable; it is the result of a series of employment policy decisions over the past two years which have made hiring staff riskier and more expensive for employers. UK businesses are dealing with a crisis in the cost of employment manufactured by Government and, without a new approach, the situation will not improve.

"Supporting job growth by removing barriers to hiring must be a priority for the incoming Government, starting with meaningful tripartite negotiations on guaranteed hours reforms. The new Prime Minister's commitment to driving economic growth across the country is welcome, but will mean little without action to bring down the cost of employment and boost job creation around the UK."

Commenting on the underlying wage growth figures and their impact on monetary policy ahead of the Bank of England’s interest rate decision on 30 July, financial experts warned that wage demands could reignite inflationary pressures.

Kevin Brown, savings expert at Scottish Friendly, said: "Steady wage growth will come as some relief to the Bank of England (BoE), but it hasn't taken the prospect of a rate rise off the table.

"Until last month, it looked as though the BoE might leave rates where they are for the remainder of the year. The escalation in the Middle East has changed that and there is a risk that it leads to a fresh wave of inflation.

“If this leads to workers asking for bigger pay rises, it could stoke inflation and leave rate-setters with little choice but to make borrowing more expensive. We don't expect the BoE to move at the next meeting on 30 July. But what happens after that depends largely on how quickly a resolution is found to the Middle East conflict.

"For households, who have endured five years of relentless price pressure, a rate rise is a bleak prospect. For savers there is at least some consolation, because higher rates should mean better returns on cash. But nothing is guaranteed and anyone whose money is earning less than inflation should shop around for a better rate or ask themselves whether their cash could be working harder for them in the stock market."