UK workers are flocking back to the labour market at the fastest pace since the pandemic began as the cost-of-living crisis takes its toll.
The outbreak of Covid sparked a surge in people leaving the workforce, sparking widespread labour shortages that have dogged the economy ever since.
But the number of economically inactive people decreased by 0.4 percentage points – or 144,000 between March and May – the biggest drop since the pandemic began. Employment surged by 296,000.
It comes as soaring inflation puts ever more pressure on household budgets, with real wages still falling at the fastest pace on record.
Adjusted for inflation, regular pay excluding bonuses dropped 2.8pc between March and May – the biggest decline since records began in 2001. With bonuses included, workers were still 0.9pc worse off.
Inflation currently stands at a 40-year high of 9.1pc and is due to push even higher when the latest data is released tomorrow, before peaking above 11pc later in the year.
5 things to start your day
1) Andrew Bailey battles to protect his empire as Tory criticism builds Bank of England faces its greatest challenge since independence amid push for reform
2) ‘Slasher’ airlines’ low wages led to travel chaos, says Heathrow boss Plus: Airlines are to blame for travel chaos for underpaying baggage handlers
3) Gen Z drives £25bn plunge in spending as income shock hits Younger generations more likely to cut back on groceries, clothing and going out than Boomers
4) Tory Party members don’t care about net zero target ‘because 90pc will be dead by 2050’ Conservative MP Chris Skidmore says climate change fight requires more urgent timeframe
5) Millions of pounds needed to meet UK heat pump targets, warns National Grid ‘Insufficient incentives’ threaten 600,000-a-year installation goal
What happened overnight
Stocks dropped in Hong Kong this morning, with the Hang Seng Index plummeting 0.6pc.
The Shanghai Composite Index inched up, while the Shenzhen Composite Index on China’s second exchange also crept higher.
Tokyo stocks opened higher, with the benchmark Nikkei 225 index up 0.7pc in early trade.
Coming up today
- Economics: Unemployment rate (UK), claimant count rate (UK), average earnings (UK), inflation (EU), ECB bank lending survey (EU), building permits (US), housing starts (US)
- Corporate: BHP, IntegraFin Holdings (trading update)