UK Unemployment Rate Down to Pre-Pandemic Levels

The beginning of 2022 saw Britain’s jobless rate returning to pre-pandemic lows, putting the Bank of England (BOE) on alert for new inflationary pressures coming from a tight labor market.

The U.K.’s unemployment rate fell to 3.8 percent for December 2021 to February 2022, matching the level in the fourth quarter of 2019, official data showed on Tuesday.

However, the proportion of the population with a job did not increase, as the employment rate remained unchanged at 75.5 percent and still short of its pre-pandemic level.

The inactivity rate instead increased 0.2 percentage points to 21.4 percent, with more people saying they had to leave the workforce to look after family or due to long-term sickness.

Economists are watching for signs that the lack of candidates to fill job vacancies — which hit a record high during the first quarter at 1.288 million — may push up wages and weigh on prices.

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