Labour market remains 'tight' as long-term sickness increases

According to the data, the economic inactivity rate decreased 0.4 percentage points in January to March this year to 21%, largely driven by people aged 16-to-24-years-old as well as those inactive due to long-term sickness.

In addition, the unemployment rate during this period increased by 0.1 percentage points on the quarters to 3.9%, driven by people unemployed for more than 12 months.

Very tight 

However, the data from ONS​ also showed the UK employment rate was estimated at 75.9% in January to March 2023, 0.2 percentage points higher than October to December 2022, driven by part-time employees and self-employed workers.

Furthermore, in February to April this year, the estimated number of vacancies in the total job market fell by 55,000 on the quarter to 1,083,000.

This was the tenth consecutive period to show decline and reflect uncertainty across industries as firms hold back on recruitment due to economic pressures, according to ONS

In a post to social media site Twitter, UKHospitality (UKH​) chief executive Kate Nicholls​ said the figures indicated the labour market remained “very tight”.

Time of despair 

The post said: “Labour inactivity falling as people return to work but record levels of people exiting the labour market due to sickness. Means labour market remains very tight - with ongoing impact on wages and prices”

This comes as last month’s figures from ONS highlighted vacancies in the accommodation and food sector were 56.9% up compared with January to March 2020, prompting UKH to call for Government “action”​ to alleviate continuing labour issues for hospitality firms.

Regarding last month’s figures, Nicholls said: “The busy summer season should be a time of optimism [but] has become one of despair.

“Staff shortages have plagued the sector for years and the labour market now appears to have stagnated at the worst time for hospitality.”