The pandemic and the lockdowns caused great swings in the economy. Historic drops, followed by historic spikes. Now that the situation has softened, some of these indicators can still be seen showing historically high rates of variations, as is the case of wages in the United Kingdom, which are growing at a rate not seen in decades given the country’s economic recovery. along with other aggravating factors.
The preferences of workers and the unemployed have varied during the crisis. Governments have shown great determination in supporting families who have lost their income, which could give the unemployed some security and remain in such a situation waiting for a better opportunity.
It is also true that workers now reward more other things such as security or spacious housing, which could also be having an impact on a labor market that has been highly concentrated in large cities.
Thus, starting wages (those paid when starting a new job) in the UK rose at the fastest rate in at least 24 years as companies were struggling to find available workers. The population that does not have a job but is actively looking for work is an increasingly reduced group, according to surveys.
Wages rise sharply in the UK
Companies are having to look for the workers they need in other companies offering better conditions. The UK is in a special situation. Beyond the strong rebound in the economy, which is causing problems for companies to keep up with demand, the islands are also suffering from a worker shortage as a result of Brexit . Many foreigners have left and many others have ruled out the United Kingdom as a destination due to the increased restrictions.
In this way, the salary that companies pay to new hires reflects an increasing competition to fill vacancies, assure from the firm KPMG and the Confederation of Recruitment and Employment in a new job. The report notes that inflationary pressure on wages is increasing after London’s exit from the European Union, which has reduced the number of workers.
British companies, from retailers to construction companies, are struggling to fill gaps in their workforce after Brexit has slowed the influx of workers from the EU, while the pandemic has caused workers to change certain habits and now show a preference for safer jobs.
All of this is causing the Bank of England to be uneasy about the possibility that inflation will rise more than expected and exceed the 2% target for longer than expected. This week’s meeting brought to light some of these fears that are already incorporated into the official forecasts of the agency, which now recognizes that inflation will be above the target for two years.
The swing of the labor market
“The challenge in the job market is different now,” Bank of England Governor Andrew Bailey said at a news conference on Thursday. “There is growing evidence of a greater number of job vacancies and the associated tightness of the labor market. The challenge of avoiding a sharp rise in unemployment has been replaced by that of ensuring a flow of labor into jobs. it’s a crucial challenge. ”
“This is a good time to look for work,” Kate Shoesmith, REC’s Deputy Executive Director, told Bloomberg . Still, he said the new immigration rules are key to meeting the increased demand for labor. “The skills shortage has been with us for a while and, as our data shows, it is getting worse.”
Vacancies are increasing at the fastest rate since this survey began in 1997. While the number of people available to fill them has fallen again in July.
Hiring for permanent positions in London and other nearby cities is hitting all-time highs, outpacing the south and north of England. Job vacancies are growing in all sectors, led by information technology and information technology .