Britain's Million Missing Workers

The latest research into the impact of coronavirus on the UK economy has produced some surprising results.

Whereas many expected a spike in unemployment when the furlough scheme ended, this hasn't occurred.

However, this week's data revealed a record number of job vacancies, and the director of the Institute for Employment Studies, Tony Wilson, has suggested that the UK labour market has actually shrunk.

”We think there's a gap of about a million people between what the labour market would have been like without Covid and where it is now."..."But actually, more recently it's been growing because of longer-term ill-health" - a problem that includes people suffering from the after-effects of the virus known as "long Covid"

Indeed, the ONS believes that the number of economically inactive has increased by 400,000 and this group have proved slow to return to the labour market.

All of which has adverse implications for Britain's supply-side performance, and macroeconomic objectives more generally. It suggests labour shortages in the UK will persist and are not just a short-term issue.