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One in five Britons STILL shuns the workforce, despite Chancellor’s bid to take thousands out of early retirement
The state of the UK labor market has increased pressure on Chancellor Jeremy Hunt as he struggles to convince people to return to work.
Data from the Office for National Statistics (ONS) showed that 21.4 percent of people were ‘economically inactive’ in the last three months of last year.
“Economically Inactive” are people who are not working and are not seeking or have been unavailable for work.
Early retirement: New data from the Office for National Statistics showed a whopping 21.4% of people were classified as ‘economically inactive’ in the last three months of last year
It covers those who have left the workforce because they are in college, retired, have an illness or injury, or are caring for family members.
The figure is stubbornly high despite a 0.3 percent drop between October and December that the ONS attributes to jobseekers aged 16 to 24.
Despite this, inactivity remained above pre-pandemic levels, indicating that the trend had become entrenched.
Between November 2019 and January 2020, before Covid hit, inactivity was at a record low of 20.4 percent.
The rate had fallen steadily since registration began in 1971, but increased during the pandemic as people lost their jobs or fell ill.
Some older Britons also decided to retire early, relying on their savings and the value of assets such as housing.
In the period from October to December last year, the number of adults in the UK classified as economically inactive was 767,000 higher than in the first quarter of 2020.
About 607,000 of these were over 50, with the 50-64 age group being the only over-18 demographic to see a sustained increase in economic inactivity over the past month.
The Chancellor has begged people to come back, begging, “Britain needs you.” He said people over 50 can have a “massively rich life by continuing to contribute to the economy,” adding, “It doesn’t have to be just about going to the golf course.”
New labor data shows unemployment is at an all-time low of about 3.7 percent, prompting businesses to raise wages, with regular wages rising 6.7 percent between October and December to help workers return to work to get.
But such price increases have fueled inflation fears, meaning the Bank of England could consider raising interest rates further, which could lead to higher mortgage and loan payments for millions of Britons.
Others warn that many older ex-employees could see their income squeezed by cost-of-living pressures, a factor that didn’t exist when many quit for good.
Growth is of particular concern to Hunt and the government after UK GDP flattened in the last quarter of last year.
The economy is expected to contract further this year.