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Highlighting the difficulties caused by problems with national statistical data, the BOE said in its quarterly report on the economy that the UK workforce is in a much healthier state than official figures suggest. He said it was possible. Bailey himself admitted that he did not know whether labor market inactivity was rising or falling.
The BoE has previously pointed to this rise in economic inactivity as a key driver of labor shortages that were fuelling wages and services inflation. Chancellor Rishi Sunak also cited it as a justification for the squeeze on eligibility for disability and disability benefits. I did.
The latest LFS statistics suggest that the labor force has grown little since the end of 2019. The LFS shows that the unemployment rate has increased over the past year, the employment rate has trended downward, and the labor force participation rate has not improved.
But other data sources show much stronger growth in employment, the BOE noted in a monetary policy report, with the labor force about 4% larger in the latest count than on the eve of the pandemic. said. Based on these data sources “the participation rate may well be significantly higher than currently estimated”.
Several members of the MPC underlined the degree to which this complicated policy decisions. “We can’t not look at the labor market. it’s very hard at the moment to know whether (workforce) participation has gone up or down and that’s challenging,” Bailey said.
Ben Broadbent, the BOE deputy governor responsible for financial analysis, said uncertainty about both the labor force survey and the volatility of individual wage data gives policymakers a variety of opportunities to build a picture of labor market trends. He said that he was forced to consider alternative indicators.
Dave Ramsden, who is also the BOE’s deputy governor, said the ONS was unable to continue publishing complete data on the flow of workers in and out of work “adding to the challenge”, adding that the workforce survey problem was “really “Important,” he said. Dealt with it.
