The British Statistical Institute announced this week that inflation has reached its highest level in the last 30 years, while unemployment has fallen to its lowest level since 1974.
The registered unemployed rate fell from 3.9 percent to 3.8 percent in one month, but earnings also fell to the lowest level in the last 50 years. The last decline before that was seen in 2013.
The electricity and natural gas hikes, effective from the beginning of April, added an average of £700 a year to household spending.
Another data is about the lack of employees. Compared to the pre-pandemic period, the number of “employee wanted” signs hanging on the doors of British employers was 1 million 288 thousand. Moreover, it is only in the first quarter of 2022. 160 thousand of this is the shortage of service personnel in restaurants.
The Telegraph newspaper reported that “Restaurant owners produce ideas that will appeal to employees”. Paying your employee’s gym dues, free food and drink on his birthday, and incremental bonuses are just a few examples. According to the news, some restaurant owners have come to the point of attracting employees from other restaurants by disguising themselves as customers.
Bank of England worried
Another news brought to the attention of those who follow the economic front is that the Bank of England is waiting anxiously for the data. Think tanks predict that rising inflation will cast a big shadow on the vibrant labor market.
Those who set the policy of the institution at the Central Bank are worried that this tightening in the workforce will combine with high inflation, rising energy prices and the deteriorated supply chain after the epidemic. For this reason, it is noted that since December, there have been moves that have not come from any other central bank, increasing interest rates three times in a row.
The Bank of England also fears that growth will slow sharply this year as the pressure on living standards intensifies, according to the comments.
The year-end inflation expectation of those who make estimations on the government budget is 9 percent. When this situation is combined with the new taxes on the payrolls, there is a fear that there will be the biggest decrease in living standards since 1950.
Employers’ recruitment in the first quarter did not turn out as economists expected. 50 thousand people will be recruited, the estimated 10 thousand are left. Negative signals are also coming from the retail sector due to the increasing pressure on consumer spending.
Does Brexit also play a role?
An important reason why businesses cannot find employees to work is the decrease in immigration from EU countries to England. It is said that the main reason for the shortage of personnel in unskilled jobs is the UK’s departure from the EU.
The epidemic reduced the number of employees in the UK by 655 thousand. This figure includes retirees and those who cannot go to work due to illness.