A new era of weaker labour supply growth in the UK
After a decade of consistently strong growth, UK labour supply has slumped since the onset of the pandemic and we expect only a partial recovery this year. The drop in labour supply is due to a combination of cyclical and structural factors, primarily virtually zero net inward migration due to the pandemic and a hiatus in the rise in the state pension age.
What you will learn:
- Though immigration should rise now that travel restrictions have eased, strict post-Brexit rules mean it’s unlikely to return to pre-pandemic levels.
- Participation rates, for males particularly, have also dropped.
- But we think this will quickly reverse given that the strong labour market recovery has created plenty of job opportunities and boosted wage growth.
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