Official figures Tuesday showed that there were nearly 1.2 million vacancies for jobs in the United Kingdom. This is a further indication of how the British economy is facing worker shortages in a variety of sectors due to the coronavirus pandemic as well as Britain’s exit from the European Union.
After weeks of waiting in long lines at gas stations, motorists were struggling to fill their cars due to a shortage of truck drivers and empty shelves at supermarkets. The Office for National Statistics stated that there was a shortage across the entire economy, including transport.
In recent weeks, it has become more apparent that the British economy is suffering from a shortage of labor. This is not only affecting truck drivers. Although the causes may be numerous, it is clear that many EU workers fled the U.K. because of Brexit and the pandemic.
According to the Institute for Employment Studies, the U.K. is currently short of 900,000. This difference is between what the current labor market has and what was expected based upon pre-pandemic trends.
Tony Wilson, director of IES, stated that “this is being driven by large drops in participation for older persons and young people, along with continued wide employment gaps and people with disabilities and people with health conditions.”
Although there is a shortage of workers, the statistics agency reported that the U.K.’s total number of workers on the payroll rose to a record 29.5 million in September. This was due to the British economy rebounding after the lifting of restrictions.
Tuesday’s forecast by the International Monetary Fund showed that the U.K. would grow by 6.8% in 2019, more than any other Group of Seven industrial country, and by an even higher 5% next year. This means that the economy will have recovered the 9.8% lost output during 2020 following the pandemic.
After the government ended its salary support program at last month’s end, workers should be able to return to the job market. This was in order to prevent further job losses.
The government paid 80% of salaries for workers who were unable to work due to lockdown measures during the Job Retention Scheme’s existence. It supported over 11 million people at its peak. However, many workers returned to their jobs after the economic reopening, and that number fell to just over 1 million.
Further evidence was provided by the unemployment figures that the program accomplished its intended purpose. According to statistics, the U.K.’s unemployment rate fell to 4.5% in June and August from 4.6% in July.
The average weekly wage rose again with an increase of 7.2% in bonuses and 6% without bonuses. This was in the three-month period ending August. The agency pointed out that these figures are still affected by the effects of the pandemic which impacted wages one year ago.
Inflation expected to reach 4% over the next months, and low productivity levels, there are concerns that wages may soon fall below price increases, further reducing household incomes in a time where the tax burden has reached its highest point in decades.