Labour market is resisting economic pressure – for now

Date : 16 November 2022

ONS has issued new data on the state of the UK labour market.

By several measures, the market remains strong, resistant to increasing economic pressure: redundancy and unemployment are low, whilst many job vacancies remain unfilled.

In IGD’s conversations with grocery industry experts, labour and skills - rather than excess - are consistent themes, restricting industry capability.

However, the danger of recession is now high – the Bank of England has warned that a very long recession should be expected, meaning that labour demand is likely to fall in future.

Click chart to enlarge

Click chart to enlarge

The number of economically-inactive people in the UK continues to grow – in September 2022, it reached almost 9 million. High economic inactivity may be one reason why unemployment is so low at present. Economic inactivity refers to people of working age who do not have a job and are not actively searching for one. Unemployment refers to those who do not have a job but are actively seeking one.

This group expanded rapidly during the COVID pandemic and there is currently no sign that inactive persons are moving back into the labour market. The key driver of growing inactivity is long-term ill-health, suggesting that “long COVID” may be a key factor limiting labour availability, along with other medical conditions which remain unresolved due to pressures on healthcare.

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