A record number of people are entering or returning to the UK job market as the cost of living continues to increase, according to the latest official data. This is due to rising costs putting pressure on household finances. The Office of National Statistics reported that there was a record-high net flow out of economic inactivity from July to September 2022 to October to December 2022, largely driven by younger people and students, and older people aged 50 to 64. The rate of UK unemployment was 3.7 percent in the three months to December, the same rate that was recorded in the three months to November. Regular pay growth was 6.7 percent in the three months, the strongest growth rate seen outside the pandemic. However, wages continued to be outpaced by rising prices, with regular pay falling by 3.6 percent once consumer prices index inflation is taken into account. The ONS also reported that the UK had the highest number of working days lost to strike action for more than a decade in December. This was due to rolling industrial action involving workers of the Post Office, the rail sector, and the National Health Service.
Commenting on the employment data, Chancellor of the Exchequer Jeremy Hunt said that the rate of unemployment remaining close to record lows is a sign of resilience in the labour market. However, the opposition parties accused the ruling Conservatives of mismanaging the economy. Despite the drop in economic inactivity, business groups said that the UK economy continues to suffer from labour shortages. The British Chambers of Commerce urged the government to reform the Shortage Occupation List to help firms fill urgent job vacancies from outside the UK when they cannot recruit locally.