Mark Carney: Prospects for the UK labour market
Speech by Mr Mark Carney, Governor of the Bank of England and Chairman of the Financial
Stability Board, at the 146th Annual Trades Union Congress, Liverpool, 9 September 2014.
* * *
President and Congress.
It is a pleasure to be in Liverpool today to discuss the prospects for the UK labour market.
The growth and distribution of jobs and incomes matter to everyone.
Employment does much more than provide the means to support workers and their families;
it is essential to personal fulfilment and human dignity.
Part of that dignity is being paid a living wage.
Over the past year, the Bank of England has ensured that it pays all of its 3,600 staff at least
the living wage.
And we have recently brought all our contracted service staff in central London up to the
London living wage.
We are in the process of our final review. But I can announce today the Bank's intention to
become an accredited Living Wage employer by the time of the next TUC conference.
Of course, the Bank of England's responsibilities for promoting the good of the people of the
United Kingdom go much further than being a responsible employer.
We manage monetary policy to achieve price stability: low, stable and predictable inflation.
And we promote financial stability by regulating and supervising financial institutions as well
as by taking targeted actions to insure against unsustainable indebtedness, as we did earlier
this year for the housing market.
By maintaining price and financial stability we put in place the foundations for sustainable job
creation and income growth.
Stability gives workers the confidence to invest in skills or to change jobs. And it gives firms
the confidence to hire new workers, invest in new equipment, introduce new products and
pursue new markets. We need workers with the right skills. And we need companies taking
strategic initiatives to grow productivity. That productivity is needed to secure real wage
increases over the medium term.
And as I will explain, the labour market is central to our decisions - decisions which must
take into account both short-term fluctuations and the profound changes sweeping labour
markets across advanced economies.
These changes include:
• Powerful demographic forces, notably the ageing of the workforce, increases in
longevity and rising participation of women in the workplace;
• How globalisation and new technologies are splitting production chains across
companies and across borders;
• How financial risk is being steadily shifted to employees from both employers and
the state through changes to the structure of pensions and benefits, reduced job
security and evolving labour market institutions, including the union movement;
•
The sharp reduction in the employment share of middle-skilled jobs, relative to
more- and less-skilled jobs; so-called job polarisation.1
Collectively, these trends have affected the dynamism of labour markets and the spending
patterns of families.
And they have interacted with the forces unleashed by the Great Recession to challenge the
durability of the expansion.
The Great Recession led to enormous dislocations in advanced economy labour markets.
In many economies unemployment and underemployment skyrocketed. Youth
unemployment reached perilous levels.
Central banks responded with unprecedented monetary stimulus.
That was consistent with their price stability mandates. And it recognised the threat that the
recession might permanently scar the workforce.
As the recovery in many advanced economies has evolved, central banks are assessing the
extent of structural changes in labour markets and are grappling with what they mean for
monetary policy.
The answer is not uniform across major economies. This is one reason why monetary policy
in the US, euro area and the UK can be expected to be less synchronised than in recent
years.
1. A tale of three labour markets
Indeed, despite common underlying influences, differences in how the labour markets of
major economies responded to the Great Recession have been striking (Chart 1).
The US
Take the world's largest economy - the United States - as a benchmark.
Unemployment there more than doubled during the recession. While that rate has recently
fallen back, that headline is much better than the details.
The number of Americans in work has only just returned to where it was before Lehman
failed, even though there are now 14 million more people of working age.
Much of the fall in the unemployment rate is the result of workers in their prime leaving the
3
labour force.2,
1
See, for example, Acemoglu, D and Autor, D (2011), "Skills, tasks and technologies: implications for
employment and earnings", Handbook of Labor Economics, Volume 4b, Elsevier.
2
See Yellen, J (2014), "Labor market dynamics and monetary policy", Remarks at the Federal Reserve Bank of
Kansas City Economic Symposium, Jackson Hole. In addition, Erceg and Levin (2013) show that there was a
reduction in US participation rates of around 21⁄2% between 2007-12. Of that, rates fell most markedly among
the young (reflecting higher educational enrolment) and 'prime age' adults 25-54 years old. There was a
sharp up-tick in older workers claiming forms of social insurance; but that was partly offset by higher
participation rates among older workers, perhaps reflecting a need to offset lost retirement income. Erceg,
C and Levin, A (2013), "Labour force participation and monetary policy in the wake of the Great Recession",
IMF Working Paper No. 13/245, July.
3
The 3pp fall in the participation rate is a marked break from its stable level in the preceding decade. Overall
participation was flat at around 66% between 2004-7. It had fallen to below 63% in early 2014 (Bureau of
Labour Statistics). By contrast, before that, and over the longer run, participation rates had been essentially
acyclical - invariant to business cycle conditions (Erceg and Levin, 2013).
Far more vacancies remain unfilled than usual, indicating big mismatches in the labour
market. And fewer people than normal are switching jobs, suggesting an ongoing reluctance
to take risks.
The American labour market still is not working as it once did.
The UK
Even though times for many families have been tough, relative to that benchmark, the UK
labour market has performed well.
Despite a recession that was deeper and more prolonged, unemployment did not rise as
much and has fallen back sharply since.4
In contrast to the US, this rapid fall has been accompanied by significantly higher
participation rates.
There are now over one million more people in work in the UK than at the start of the crisis.
Total hours worked are some 4% above their pre-crisis level.
That exceptional employment performance has come at a cost, however: wage growth has
been very weak. Adjusted for inflation, wages have fallen by around a tenth since the onset
of the crisis.
To find such a fall in the past, you would have to look back to the early 1920s.
The weakness of pay has, in effect, purchased more job creation. It has not resulted in an
unusually high level of profits.
The burden of the Great Recession has been shared across the UK. Profits have been
squeezed almost as much as labour costs. Employees have seen their real incomes
reduced, but more people are in work as a result.
In the US, the burden has been much more concentrated on those who have lost, and not
regained, work. And in contrast to the UK, American companies have increased their profits
significantly as a share of national income.
The euro area
What makes the UK performance even more remarkable is that we have faced the added
challenge of rebuilding competitiveness.
In the run-up to the crisis, the UK's economy had become increasingly imbalanced.
When the crisis hit, sterling fell by a quarter. Prices of imported goods rose sharply and that
fed through to higher inflation.
The squeeze on real incomes was pronounced. And yet there were relatively few calls for
higher wages to compensate.
As a result of that painful adjustment, the UK is more competitive. And if the world economy
returns to a surer footing, there is a real prospect that the UK can properly rebalance its
economy.5
Euro-area countries have needed to make similar - if larger - adjustments to restore
competitiveness but with less flexible labour markets and without a flexible currency
(Charts 2-4).
The results have been dire. Euro-area unemployment has risen sharply over two successive
recessions to its current rate of over 11%. It stands at over 14% in Portugal, 20% in Spain,
and 25% in Greece.
Over 6% of the euro-area labour force is now long-term unemployed and in danger of
becoming detached from the labour market.6 And despite high unemployment, there is
evidence of labour shortages.7
There is a clear danger of a misplaced if not lost generation of workers in the euro area and
in the US. Britain's labour force and trade unions deserve great credit for ensuring that this
risk is much lower in the UK. By sharing the burden, our economy is better positioned for the
future. The question is whether we will seize the opportunity.
2. Why the UK labour market outperformed: a labour supply shock
Before considering how we can, it is helpful to understand just why the UK labour market has
outperformed.
When the recession hit, the demand for labour naturally fell. But surprisingly the potential
supply of labour appears to have increased as well with an estimated 1.5 million people
entering the labour force.
The number of additional people wanting to work overwhelmed the longer-term effects of
population ageing, which, all else equal, would have been expected to have removed around
half a million people from the labour force (Chart 10).
This expansion of the workforce is being driven mainly by women and older workers. Before
the Great Recession, between 46% and 83% of those in the 50- to 64-year-old age cohort
were active. Now it is between 60% and 89% (Table 1). In part this reflects a continuation of
past trends within age cohorts, but it goes much further.8
The greater risks and financial burdens that many are now facing are likely to be important
drivers of the recent increase in the labour force.
Changes to pension arrangements have encouraged people to work longer.9 State pension
ages are rising, and the default retirement age has been abolished.10
6
The average of European Commission, OECD and IMF estimates of structural unemployment have increased
from 8.8% in 2008 to 10.3% in 2013, reported in Draghi, M (2014), "Unemployment in the euro area", Speech
at the annual central bank symposium in Jackson Hole, August.
7
There is evidence of there having been an increase in skills mismatch both in the rightward shift of the
euroarea Beveridge curve and as indicated by skills mismatch indices. See Draghi (ibid.).
8
Since 2007, annual average growth in participation rates has increased by 3 basis points for those between
50 and 59 years old to between 10 and 15 basis points (Table 1). For those over 65, the increase in
participation growth rates has been around 6 basis points. Growth in participation rates also increased by
around 5 basis points for those in age cohorts between 35 and 49 since 2007.
9
Banks et al (2005) find that those in (predominantly final-salary) employer defined benefit plans report
chances of working at age 60 that are, on average, 3 percentage points lower than those of individuals in the
State Earnings-Related Pension Scheme (SERPS), an average-earnings-based defined benefit scheme.
Those with defined contribution pension arrangements report probabilities up to 7 percentage points higher
than those in SERPSs. See Banks, J, Emmerson, C and Blundell, R (2005), "The balance between defined
benefit, defined contribution, and state provision", Journal of the European Economic Association, 3(2-3):
466-76.
10
Cribb et al (2014) find that women's employment rates at age 60 increased by around 7 percentage points
when the state pension age was increased to 61. Male partners' employment rates also increased - by around
Reforms to the UK's welfare system, including attaching job-search conditions to welfare
payments, could have prompted those affected to seek work.11
Sharp falls in wealth and increased uncertainty about future incomes following the financial
crisis have undoubtedly changed many people's retirement plans, making them work longer
and retire later in order to compensate.12
And the scale of the debt accumulated by Britain's households in the run-up to the recession
has encouraged more people to work, and to work longer.13 Around 40% of households
reported being concerned about their levels of debt in 2013.14 Almost a tenth of households
in a recent Bank of England survey said they were working more because of concerns about
repaying their debt.
So the strong performance of the UK labour market reflects in part people feeling compelled
to work for financial or other reasons.
When British workers have been challenged, they have not given up (Charts 5-8). Some
have taken less productive or lower-skilled jobs. Others are working part-time. Some have
become self-employed. Others are prepared to do the same work for less than they would
have done.
Wage pressures are, on past relationships, as low as if the unemployment rate were around
10%, not the 6.4% it is today (Chart 9).15
With more workers at competitive wages, companies have been encouraged to hire. They
already had reason to favour labour over new capital investment given the higher cost and
lower availability of credit following the financial crisis.16
4 percentage points - perhaps indicating a desire by couples to coordinate their retirement planning. Cribb, J,
Emmerson, C and Tetlow, G (2014), "Incentives, shocks or signals: labour supply effects of increasing the
female state pension age in the UK", IFS Working Paper No. 13/03.
11
For example, out-of-work lone parents with older children must now claim Job Seekers Allowance, a benefit
with job search conditions attached, unlike previous Income Support. Consistent with these changes, Blundell
et al (2014) find that participation and employment rates appear to have increased strongly (by 8-9%) among
lone mothers who were affected by the 2010 changes. Blundell, R, Crawford, C and Jin, W (2014), "What can
wages and employment tell us about the UK's productivity puzzle?", The Economic Journal, 124 (May). See
also Avram, S, Brewer, M and Salvatori, A (2013), "Lone parent obligations: an impact assessment",
Department of Work and Pensions Research Report No. 845.
12
Blundell et al (2014) examine the effects of the peak-to-trough wealth shocks implied by the financial crisis on
older workers' labour supply. They focus on individuals aged 55-74, and examine whether changes in wealth
help to predict future employment patterns in 2010-11 given employment status in 2006-7. They find
evidence that shocks to housing wealth helped to predict employment status. For example, compared to the
least affected 20% of men, the worst affected 20% of men were 14% more likely to be in work in 2010-1. The
authors caution against taking too strong an interpretation of their results, however. For example, the regional
house price indices used to calculate changes in housing wealth may be capturing wider regional variation in
labour demand.
13
Eggertson and Krugman (2012) illustrate how increased labour supply is one margin through which
households that need to de-lever can do so. Eggertson, G and Krugman, P, (2012), "Debt, deleveraging and
the liquidity trap: a Fisher-Minsky-Koo approach", Quarterly Journal of Economics.
14
See Bunn, P and Rostom, M (2013), "The financial position of British households: evidence from the 2013
NMG Consulting survey", Bank of England Quarterly Bulletin, Q4.
15
Based on the relationship between average earnings adjusted for inflation expectations and unemployment
between 1993 and 2012. See Broadbent (2014), "Unemployment and the conduct of monetary policy in the
UK", Speech at the Federal Reserve Bank of Kansas City 38th Economic Symposium, Jackson Hole,
Wyoming.
16
See eg Broadbent (2012), "Productivity and the allocation of resources", Speech at Durham Business School,
September.
This substitution of labour for capital across the economy has continued to lower productivity
per hour worked.
That weak productivity growth is not the result of laziness on anyone's part. It is a natural
consequence of so many people wanting to work and companies employing them in place of
capital.
Since the typical economist asks whether what they have observed can work in theory, the
annex shows how a "labour supply shock" results in a lower path for real wages and
productivity, higher employment, and greater downward pressure on wage growth at any
particular rate of unemployment.
Although the adjustment has been painful, trading off lower productivity and wages for much
higher employment, on balance it provides a solid foundation for a durable expansion. That is
because keeping people in work through a recession maximises the prospects for individuals
and the economy.
By staying in work, individuals retain and learn new skills. And they are better placed to
participate in the expansion when it gathers force. This can make a material difference to an
individual's lifetime earnings.17
For the economy, maintaining workforce attachment is the best way to ensure that cyclical
downturns in aggregate demand for goods and services do not translate into permanent
reductions in our economy's potential to supply them.
As a result, Britain has an opportunity, not often seen after a deep recession, to reach and
sustain a higher level of employment than in the past. And workers can maximise their pay
prospects.
But, you rightly ask, when will this start? When will Britain get a pay rise?
The expansion of labour supply does not mean permanently weak growth of real incomes.
As employment approaches its new higher level, wage pressures should increase and capital
investment should continue to recover. Productivity growth should pick up bringing the
higher, sustainable pay rises that British workers deserve.18
Specifically, the Bank's latest forecast expects real wage growth to resume around the
middle of next year and then to accelerate as the unemployment rate continues to fall to
around 51⁄2% over the next three years.
By the end of our forecast, we see 4% nominal pay growth on average across the economy.
This is consistent with our inflation target and the economy's potential. I will touch at the end
of my remarks on how workers and employers can raise that potential.
But first let me turn to the implications of all these labour market developments for monetary
policy.
17
Oreopoulos et al (2012) estimate that a rise in unemployment by 5 percentage points implies an average initial
loss of earnings for new college graduates of around 9 per cent, an effect which fades only after a decade.
The persistent effects from adverse labour market conditions are much larger for individuals in the first year of
their careers than for those with a few years of experience. And losses are magnified for those whose
earnings are predicted to be lower, based on their college major. See Oreopoulos, P, von Wachter, T and
Heisz, A (2012), "The short- and long-term career effects of graduating in a recession", American Economic
Journal: Applied Economics, 4(1), pages 1-29.
18
See Barnett, A, Batten, S, Chiu, A, Franklin, J, and Sebastia-Barriel, M (2014), "The UK productivity puzzle",
Bank of England Quarterly Bulletin, Q2, for an analysis of the UK's "productivity puzzle". The standard view
has been that the UK has suffered from a collapse in the underlying growth rate of productivity. On that basis,
we would not expect there to be significant scope in future for either productivity or real wage growth. The
interpretation of the recent behaviour of the labour market as a labour supply shock has more positive
implications for the future.
3. Monetary policy implications
One of our roles at the Bank of England is to deliver price stability in a way that supports jobs
and growth.
Our price stability objective is clear: the inflation target of 2% CPI inflation.
Supporting jobs means helping the economy reach the maximum sustainable level of
employment. That level changes as the economy changes.
That is why, a little more than a year ago, even though inflation had been above the target for
most of the past five years and economic growth was poised to accelerate, we did not raise
interest rates from their historic low level of 1⁄2%.
We did not because we recognised that the UK had a huge number of unemployed and
under-employed workers and that the economy was running below full capacity. We
expected inflation to fall back. We saw that confidence might have been returning, but it
remained fragile. We knew the nascent recovery was not yet secure.
So we used the flexibility in our remit, given to us by Parliament, to return inflation to the
target over a longer period than usual in order to support sustainable jobs and growth.
To make our intentions clear, the Bank committed not to even think about raising interest
rates from historic lows at least until unemployment fell back to 7%.
That guidance gave businesses the confidence to hire and invest. It reassured households
that the costs of servicing their debts were not about to rise abruptly at a time when they
remained particularly sensitive to interest rates. And it evolved with the economy.
The effectiveness of that policy has been reinforced by the healing of the financial sector.
Prompted by the Bank of England, British banks have raised over £140 billion in new capital
in the past few years. They are right-sizing their balance sheets and re-focussing their
businesses.
The recovery has exceeded all expectations. It has momentum. There has been a sustained
and sharp fall in the unemployment rate to 6.4%. Over 800,000 jobs have been created in
the past year alone. We expect robust growth of 31⁄2% this year and 3% in 2015.
The challenge now is to secure a durable expansion; to make sure the economy realises its
full potential.
What does that mean for interest rates?
With many of the conditions for the economy to normalise now met, the point at which
interest rates also begin to normalise is getting closer. In recent months the judgement about
precisely when to raise Bank Rate has become more balanced.
We have no pre-set course, however; the timing will depend on the data.
Moreover, the precise timing of the first rate rise is less important than our expectation that,
when rates do begin to rise, those increases are likely to be gradual and limited. Rates will
go up only as far and as fast as is consistent with price stability as part of a durable
expansion, with the maximum sustainable level of employment.
For a variety of reasons ranging from the weakness in the euro area, to ongoing repair of
household balance sheets, we are not expecting interest rates to head back to the levels
seen before the Great Recession.19
The actual path of interest rates will be determined by the evolution of the balance of
aggregate demand and aggregate supply.
Before the crisis, monetary policy largely tracked developments in aggregate demand
because the structural dynamics of labour supply and productivity growth were relatively
consistent.20 But in the wake of the crisis, the supply side of the economy has been anything
but predictable.
Originally, we thought the major uncertainties were centred on productivity growth.
But as the Bank's Monetary Policy Committee (MPC) has seen wages, employment and
productivity evolve, we are increasingly of the view that there has been a material labour
supply shock for the reasons that I have discussed.
So we have been paying increasingly close attention to developments in the labour market.
Our forecasts for the next three years, and hence our interest rate decisions, are based on
key judgements that:
• the number of people participating in the labour force will continue to rise, reaching
64% of the population later in the year and continuing its upward trend of the past
decade;
• the unemployment rate that the economy can sustain without generating
accelerating inflation will return to where it was before the Great Recession (around
5%), and, at around 51⁄2% now, is currently only a little above that; and
• there is scope for the average hours people work to increase further, reducing by
about half the current gap between actual and reported desired hours.
In short, and unlike the US and euro area, the economy is likely to be able to sustain a higher
level of employment than in the past. The uncertainty is less the direction of that
development and more its magnitude.
To assess that magnitude and its implications for inflation, we are tracking a range of
indicators, including those of the prospective paths for wages and unit labour costs.
Actual wage growth, at just 0.6% since a year ago excluding bonuses, is currently very
weak.21 However, there are some leading indicators that point to a modest pick up over
coming quarters.
For example, job-to-job flows have been increasing (Chart 11) and some surveys of pay
growth have picked up more sharply in the last year. Although the relationship between these
surveys and average wage growth has become less robust in recent years (Chart 12), they
do offer encouraging evidence of better wage prospects for those changing or finding new
jobs.
Of course, the pay of existing employees needs to pick up as well. After all, what matters for
economy-wide inflation is the average wage relative to economy-wide productivity.22 To that
end, we will be closely monitoring pay settlements that are bunched around the turn of the
year and taking a steer from the pay of new hires as a potential leading indicator of broader
pay pressures.
Some observers have discounted the implications for inflation of the recent weakness of pay
growth because it stems from the types of jobs being filled - a "compositional effect".
However, these are real jobs being performed by real people, and an increase in
lowerskilled lower-wage jobs is one consequence of working-off the labour supply shock. We also
need to be mindful of the possibility that it represents part of a longer-term trend towards job
polarisation.
What matters for inflationary pressures, irrespective of the type of job, is the relationship
between wages and productivity, as captured by unit labour costs. Across the economy,
wage growth is barely above productivity growth. Unit labour costs are currently soft (growing
at only around 1% in the economy as a whole), are below the growth rate necessary to meet
the inflation target, and indicate that there is further to go before we reach the new
sustainable level of employment.
In other words, there is still slack in the labour market that must be used up, and the recent
revisions to the profile of UK output up to 2012 seem unlikely to change that assessment
materially. That slack is wasteful. And if it were to remain, inflation would remain below the
2% target.
The MPC's current best collective judgement is that, while it has narrowed rapidly, this slack
is broadly in the region of 1% of GDP. As this margin of slack continues to narrow, we expect
wages to pick up slightly faster than productivity, and unit labour cost growth should
increase, consistent with meeting the inflation target.
However, the MPC expects it will take the better part of three years for this to happen.
With inflation at 1.6%, continuing downward pressure from the appreciation of sterling, and
with slack remaining, the current inflation environment is benign. But it will not remain benign
if we do not increase interest rates prudently as the expansion progresses. Our latest
forecasts show that, if interest rates were to follow the path expected by markets - that is,
beginning to increase by the spring and thereafter rising very gradually - inflation would
settle at around 2% by the end of the forecast and a further 1.2 million jobs would have been
created.
In other words, we would achieve our mandate.
There is, as always, uncertainty about the future.
But uncertainty does not mean stasis. You can expect interest rates to begin to increase.
The exact path will depend on the economy. Our assessment will undoubtedly change as the
economy evolves and policy will of course be adjusted if geopolitical events have a material
impact on the outlook.
If indicators suggest the economy is moving more slowly towards our goals, we will have
learned that we are further from sustainable capacity. Prospective wage and unit labour cost
growth will be weaker. Rates will go up later and more gradually.
And should we see faster progress, prospective wage and unit labour cost growth will be
stronger, which will suggest we are closer to maximum capacity and that the economy can
sustain higher rates sooner.
In all events, rate rises can be expected to be gradual and limited compared to the
experience of the UK in the past.
4. Conclusion
We are under no illusions. The Great Recession was a calamity. Britain's workers have
borne many of the consequences.
Our job is to ensure the economy achieves its potential and to maintain price and financial
stability, for sustainable growth in jobs and incomes.
But monetary policy cannot do it alone.
Others - including trade unions, government and businesses - will determine the potential of
this economy. You will ultimately determine the size of Britain's pay rise.
Those in work need to be able to seize new job opportunities in a world where technology
and globalisation cause labour markets to shift rapidly.
Skill levels need to be raised continually. That is of course first and foremost about
education. But crucially it also means access to lifelong learning, both on and off the job,
available to all.
The TUC's engagement with the UK's skills agenda is a major contribution to realising that
imperative. In the past year alone, unionlearn, has supported over 200,000 people to invest
in their skills.
Such investments are crucial for the durability of this economic expansion and for Britain's
future. They will help to deliver long-term productivity - so that the British people get the pay
rise they deserve.
Chart 1: UK unemployment rose by less Chart 2: Increase in UK unemployment
than in the US initially and fell more was considerably smaller than those in
rapidly than in the euro area Ireland and Spain.(a)
subsequently.(a)
Sources: Eurostat and Bank calculations Sources: Eurostat and Bank calculations.
(a) Percentage of the 15-74 population in the US and euro (a) Percentage of the 15-74 population in Ireland. Percentage
area. Percentage of the 16-74 labour force in the UK. of the 16-74 labour force in Spain and the UK.
(b) Data are based on a changing composition of the euro
area, which currently includes 18 countries.
Chart 3: Nominal compensation growth Chart 4: ... but real compensation fell
in the UK outstrips that in Spain and more markedly in the UK, supporting
Ireland...(a) employment.(a)
Sources: Eurostat and Bank calculations. Sources: Eurostat and Bank calculations.
(a) Compensation of employees (expressed in national (a) Wages and salaries (expressed in national currencies)
currencies) divided by number of employees. deflated by CPI and divided by number of employees.
(b) Whole economy average weekly earnings (total pay)
deflated by CPI.
Chart 5: More of the rise in employment Chart 6: Employment in services has
since the crisis has been part-time than recovered faster than in other sectors.(a)
full-time employment, although full-time
employment has recovered strongly in
the past year.
Sources: Labour Force Survey and Bank calculations. Sources: Workforce jobs and Bank calculations.
(a) Total number of people working full time, based on LFS (a) Uses Workforce Jobs by industry data seasonally
respondents' self-classification. adjusted by ONS. Industries are grouped by Standard
(b) Total number of people working part-time, based on LFS Industrial Classification (SIC) 2007.
respondents' self-classification.
Chart 7: Employment growth has been Chart 8: The UK Beveridge curve has
strong among the most highly skilled been returning towards its past position.
since the crisis, but low-skilled
employment has recently rebounded.
Sources: Labour Force Survey and Bank calculations. Sources: Labour Force Survey and ONS Vacancy Survey
(a) Uses the Standard Occupational Classification (SOC) 2000. (a) Total vacancies divided by number of people aged 16+ in
Seasonally adjusted by Bank staff. employment.
(b) Includes managers, professional and associal profe