Britain’s Labour Market Update

LONDON (Reuters) – Britain’s issue with people exiting the labour market is less severe than previously thought, according to the country’s statistics agency.

The inactivity rate, measuring those not working and not looking for work, was estimated at 22.1% for the April-to-June period, down from an earlier estimate of 22.2%, as reported by the Office for National Statistics (ONS).

The ONS has faced challenges reaching survey respondents since the COVID pandemic and is revamping its labour market measurement methods.

Bank of England Governor Andrew Bailey commented that the lack of a clear employment picture is a significant concern.

As the Bank of England closely monitors the labour market to assess inflationary pressures and when to adjust interest rates, new estimates from the ONS show that the employment rate is now 74.6%, up from 74.5%, while the unemployment rate remains steady at 4.2%.

In October 2023, the ONS paused the publication of official Labour Force Survey (LFS) data due to low response rates post-pandemic and began releasing experimental estimates based on tax and other data sources.

The ONS plans to provide a more comprehensive evaluation in early 2025 regarding the use of its new Transformed LFS as the primary source for labour market data.