- By Michael Race
- Business reporter, BBC News
Image source, Getty Images
More than a fifth of adults in the UK were deemed not to be actively looking for work between November and January, official figures suggest.
The UK’s economic inactivity rate was 21.8% in the three-month period, higher than a year earlier, the Office for National Statistics (ONS) said.
It means 9.2 million people aged between 16 and 64 in the UK are not in work nor looking for a job.
Concerns have been raised over worker shortages affecting the UK economy.
The number of people not employed or actively looking for work surged during the Covid pandemic, but started to fall as lockdowns ended and restrictions eased.
But economists have said the UK’s economic inactivity rate has proved more persistent, with the government’s official forecaster highlighting that more than 700,000 people were currently not in work or seeking employment compared to pre-pandemic levels.
About a third of the working-age inactive population cited long-term illness as the main reason for not being in the labour force, according to the Office for Budget Responsibility.
It has led to Chancellor Jeremy Hunt setting out a series of measures in his Budget last week aimed at encouraging people to find work, or increase hours.
The main economically inactive groups of people aged between 16 and 64 are students, people who look after family or a home, people who are long-term sick or disabled and early retired and discouraged workers.
The ONS said its latest figures suggested the number of people inactive due to being sick fell in recent months, but remained higher than estimates a year ago.
It said there had been an increase in people aged 16 to 34 becoming economically inactive, but that the number aged 35 to 64 had fallen.
Liz McKeown, director of economic statistics at the ONS, said that despite the high number of people being deemed economically inactive, the “overall number of people in work is still rising”.
She said while job vacancies had fallen, the number of roles available was still more than 100,000 above pre-pandemic levels.
Alexandra Hall-Chen, principal policy adviser for employment at the Institute of Directors, said there was “little” in Mr Hunt’s Budget to increase the UK’s labour supply, adding that many businesses were “still struggling to access the skills they need”.
“Government should focus on delivering on its promised expansion to childcare provision,” she said. “A future government should place tackling skills shortages and increasing labour force participation at the centre of its growth plan.”
Jane Gratton, deputy director of public policy at the British Chambers of Commerce, added that while the government’s free childcare policy was “positive”, there was “still more to do to get people back into work”.
“Business also has a role to play in tackling shortages. By ensuring fair and flexible workplaces, alongside training and upskilling, employers can make their jobs more accessible to a broader talent pool,” she said.
The latest figures from the ONS also showed:
- The unemployment rate remained steady at 3.9% in the three months from November to January, which was marginally higher than economists had forecast
- Growth in regular pay, which excludes bonuses, slowed again, but at 6.1% is still outpacing inflation by 2%
- There were 203,000 working days lost because of strike action across the UK in January 2024
- Job vacancies from December to February 2024 were down by 224,000 from the previous year but they remained 107,000 above pre-Covid levels.
The ONS has issued warnings over the reliability of its jobs market data, with the survey upon which its results are based on having a smaller number of respondents than has historically been the case.
Questions over the data on the jobs market raise issues for the Bank of England, which closes watches the ONS’s releases to gauge the health of the UK economy.
Its governor Andrew Bailey has previously said the figures have posed “challenges” as policymakers weigh up what to do about interest rates in the coming months.
The Bank’s main interest rate is at a 16-year high of 5.25%, which has led to higher mortgage rates due to the cost of borrowing money being more expensive, though returns on savings have also gone up.
Analysts have suggested rates could be reduced for a first time in June, but four of the UK’s largest mortgage lenders, Halifax, NatWest, Santander and the Co-Op Bank, have increased mortgage rates this week.
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