[ad_1]
The cracks are starting to show.
Tuesday’s labour market figures suggest that the economic malaise afflicting the country is now spreading to the jobs market.
The unemployment rate edged higher in the three months to September to 3.6%, in a sign that employers are paring back their hiring plans in the face of rising costs and weaker demand.
Vacancies fell for the fourth quarter in a row and redundancies also edged higher at a time when businesses are facing a severe squeeze.
The worst is yet to come.
Separate figures show that the insolvency rate for companies is at a 13 year high, which is likely to usher in more job losses.
This could be the beginning of a painful period for the workforce.
The Bank of England expects the jobless rate to have almost doubled by 2025 as the country braces itself for a prolonged two-year recession.
It wasn’t too long ago that the country was enjoying a post-pandemic jobs boom, with businesses struggling to recruit and unemployment at record lows.
This tightness, which the government repeatedly hailed as a sign of the economy’s “resilience”, was largely driven by economic inactivity.
Almost nine million people are neither in work nor looking for work, so they don’t show up in the unemployment figures.
The surge in the “hidden unemployment” over the past year means that the workforce is smaller than it was before the pandemic.
Although today’s figures show that the jobless rate rose it is still close to record lows, largely because of a surge in economic inactivity, which is flattering the headline rate of unemployment.
The actual level of worklessness is much higher.
The tightness of the labour market over the past year did provide some opportunity to those in work and looking for work, with some managing to negotiate chunky pay deals.
However, that window of opportunity is closing.
Higher unemployment will take some of the pressure off wage demands, which does not bode well for households who have…
[ad_2]
