UK workers are returning to the job market at the fastest pace since the pandemic began as the cost of living crisis takes its toll.
The Covid outbreak caused a surge in the number of people dropping out of the workforce, leading to widespread labor shortages that have plagued the economy ever since.
But the number of economically inactive people fell by 0.4 percentage point, or 144,000, between March and May, the biggest drop since the pandemic began. Employment increased by 296,000.
It comes as skyrocketing inflation puts increasing pressure on household budgets, and real wages continue to fall at the fastest rate on record.
Adjusted for inflation, regular pay without bonuses fell 2.8% between March and May, the biggest drop since records began in 2001. With bonuses included, workers were still 0.9% worse off.
Inflation is currently at a 40-year high of 9.1% and is expected to rise further when the latest data is released tomorrow, before peaking at 11% later in the year.
5 things to start the day
1) Andrew Bailey fights to protect his empire as conservative criticism mounts Bank of England faces its biggest challenge since independence amid reform push
two) Low wages from ‘Slasher’ airlines led to travel chaos, says Heathrow boss Plus: Airlines are to blame for travel chaos by paying baggage handlers less
3) Gen Z causes £25bn drop in spending as income crunch hits Younger generations are more likely to cut back on food, clothing, and going out than Boomers
4) Tory Party members don’t care about net zero target ‘because 90% will be dead by 2050’ Conservative MP Chris Skidmore says fighting climate change requires a more urgent time frame
5) Millions of pounds needed to meet UK heat pump targets, warns National Grid ‘Insufficient incentives’ threaten installation goal of 600,000 a year
what happened during the night
Stocks fell in Hong Kong this morning, with the Hang Seng Index tumbling 0.6%.
The Shanghai Composite Index advanced, while the Shenzhen Composite Index on China’s second largest bourse also rose.
Tokyo shares opened higher, with the benchmark Nikkei 225 index up 0.7% in early trading.
- Economic Sciences: Unemployment Rate (UK), Applicant Headcount Rate (UK), Average Earnings (UK), Inflation (EU), ECB Bank Lending Survey (EU), Building Permits (US), housing starts (US)
- Corporate: BHP, IntegraFin Holdings (business update)