On the face of it, Britain’s labour market is in rude health. Employment rose in the final three months of 2023 and unemployment fell to 3.8%. Earnings, adjusted for inflation, rose for a sixth successive month. All are traditionally signs of strength – not an economy that may well have been in recession in the second half of last year.
Scratch beneath the surface and things look less rosy. The latest bulletin from the Office for National Statistics (ONS) reveals that one reason the jobs market is running so hot is because of a lack of workers caused by long-term ill-health. The number of people inactive for health reasons was 2.8 million by the end of 2023 – a rise of more than 200,000 on the year and a jump of 700,000 since before the Covid pandemic. In a literal sense, this is a sick economy.
