This morning’s labour market release from the ONS, largely referring to the first quarter of the year, paints a predictable picture given what was known of forthcoming minimum wage increases and the hike to employer national insurance.
Employment is down, unemployment is up and vacancies have fallen back to pre-Covid levels. Inactivity has marginally declined: while this is a positive feature it is probably one of the reasons for the rise in unemployment.
Rising real earnings may be a comfort for those actually in work, though for many part of this will have disappeared in extra tax as pay creeps into higher bands which are not being uprated for inflation.
There is little on the horizon which will alter a gradually worsening environment for those businesses considering taking on employees. Measures in the Employment Rights Bill, which will come into force over the next eighteen months or so, will further raise the costs of taking on workers and make employers particularly wary of taking on the risk of younger and less experienced labour market entrants.
Overall a fairly gloomy picture and one which offers little prospect of the growth which the Chancellor is looking for to make her sums add up.
