UK Job Market Stays Strong but Long-Term Sickness Absence Clouds Outlook
• Employment rose while unemployment fell indicating a strong labour market, yet high long-term sickness absence signals an underlying issue • 2.8 million people are economically inactive due to health reasons, up over 200,000 in a year and 700,000 since pre-pandemic • High job vacancies persist and employers are plugging gaps with migrant workers, keeping the labour market tight • Regular private sector wage growth remains high at 6.2% annually, slowing but exceeding Bank of England forecasts • Pressure to address long-term sickness through budget measures and caution on interest rate cuts due to high wage inflation