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UK employment and nominal wage growth will weaken

Friday, January 6, 2023

Significance

However, vacancies are now falling in most sectors. The job market will weaken this year and appears to be structurally weaker than it was in the 2010s, with higher levels of inactivity due to sickness and disability.

Impacts

  • Unemployment is unlikely to rise as fast as forecast by the BoE or Office of Budget Responsibility (OBR).
  • The rise in the number of people out of the workforce because of sickness and disability will have long-lasting negative impacts.
  • A decline in wage growth will ease pressure on the BoE to raise interest rates.

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