External member of the Monetary Policy Committee Megan Greene looks at two recent puzzles in the UK labour market: first that unemployment has remained relatively low despite subdued output, and second that some wage strength remains unexplained as inflation expectations ease and the labour market loosens. She evaluates whether excess labour hoarding can partly explain both puzzles and what the monetary policy implications may be going forward. Many thanks for hosting me at Make UK. Given the interests of this group and the challenges I’m told some of you have faced with recruitment, I thought I would spend some time taking a deep-dive into recent UK labour market developments. Over the last 2-3 years, we have seen a historically tight labour market, driven by recruitment difficulties as the pandemic likely caused structural shifts. I aim to focus on two puzzles that have been a feature of this period. First, unemployment has remained at historically low levels despite subdued economic growth. And second, wages have remained high amid an easing labour market and inflation expectations. Labour hoarding may partially explain both. Click here for full details.
Megan Greene
Speech
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Two Puzzles: Recent UK Labour Market Dynamics − Speech By Megan Greene, Bank Of England External Member Of The Monetary Policy Committee, Given At Make UK
Date 16/05/2024
