Businesses will need to hire more immigrant workers to overcome skills shortages as the outlook continues to improve, according to a senior economic commentator.

Terry Jones (pictured), head of accountants BDO in Yorkshire, expressed his view after the accountancy firm’s latest business trends report showed that hiring intentions are at their highest since 2008.

Mr Jones said: “Our data shows that employers are growing their hiring intentions month on month. If we are to avoid skills shortages and the wage inflation that will inevitably follow, we are going to need to attract more workers to our shores. However, recent evidence suggests that foreign students, a vital pillar of our education system and a source of overseas earnings, have been put off coming to the UK. The strident tone of the debate perhaps may put talented professionals off working here too. The harm that this will do to the economy is something we should all strive to avoid.”

The latest BDO report revealed that companies’ hiring intentions reached a six-year high last month, approaching levels not seen since before the pre-crisis economic boom in 2005-2007.

BDO said underemployment remained high, with competition for jobs likely to remain fierce and labour-intensive services firms continuing to benefit from low wage growth. Until this remaining spare capacity in the economy is spent, inflation is likely to linger close to the Bank of England’s two per cent central target.

BDO’s Employment Index rose from 102.7 in February to 104.3 in March, pointing to expansion in the labour market. BDO said the figure suggested that falls in unemployment would continue in 2014. The company said confidence in employment growth was mirrored by a rise in optimism which returned to January’s all-time high of 103.8 in March, up from 103.3 in February – buoyed by strong optimism among manufacturers whose confidence index rose from 118.2 to 119.4 in March, compared with the previous month.

The services index stayed at 100.8. BDO said the figures pointed to continued solid economic growth for the next six months.

BDO said the economy is expanding at a rate well above its long term trend, with its Output Index reaching its second-highest recorded reading of 102.9 in March, up from February’s 102.7.

The index has only ever been higher in May, 2006, when credit was abundant.

BDO said low inflation was likely to have contributed to growth expectations.

Mr Jones said: “After a difficult few years, the above-trend growth we’re seeing in businesses’ hiring intentions bodes well for George Osborne ahead of the election.”