How a worker exodus is hitting growth in the UK
The House of Lords Economic Affairs Committee have published a report looking at the state of the UK economy, noting that the loss of half a million workers from the UK economy poses an existential threat to macroeconomic stability.
This and rising economic inactivity are going to have implications for growth and for inflation going forward, as well as put increased strain on public services.
According to the report:
"Earlier retirement is the biggest of four factors that have made it harder to fill jobs. Increasing sickness; changes in the structure of migration; and an ageing UK population, whose impact was previously concealed by other trends, have also contributed."
Background (taken directly from the report)
- Since the start of the pandemic, economic inactivity has increased by 565,000 people.
- This is quite different from what has happened in most other developed economies, where inactivity rose during the COVID-19 pandemic but has since fallen back.
- Job vacancies have peaked at 1.3 million, and unemployment has fell to its lowest level since 1974.
- Meanwhile, there has been a fall of 171,000 in the number of EU workers but a rise of 186,000 in the number of non-EU workers.