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Inactivity in jobs market rises as long-term sick hits record high

Britain’s jobs market continues to be dogged by rising inactivity in the workforce as those off due to long-term sickness hit a record high – while more young people are now out of work and not looking for jobs, official figures have shown.

The rate of inactivity in the labour force lifted to 21.6% in the third quarter, up from 21.4% in the previous three months, the Office for National Statistics (ONS) said.

ECONOMY Unemployment
(PA Graphics)

The latest statistics put the number of 16 to 64-year-olds not in work or actively seeking work at just under nine million between July and September, more than half a million higher than at the end of 2019.

Workforce inactivity was largely driven by yet another rise in the number of people off work due to long-term sickness, which jumped to a record high of 2.5 million.

But the rate also increased due to a greater number of younger people aged 16-24 years and 35-49 years not in the employment market.

Darren Morgan, director of labour and economic statistics at the ONS, said: “The proportion of people neither working nor looking for work has risen again.

“Since the onset of the pandemic, this shift has largely been caused by older workers leaving the labour market altogether, but in the most recent quarter the main contribution has actually come from younger groups.”

James Smith at ING said the lengthy NHS waiting lists seen since the pandemic is likely to be a factor behind rising inactivity, which is compounding worker shortages in the UK.

He said: “There are now almost half a million additional people registered as out of the workforce due to long-term illness than before the pandemic began.

“Unnervingly, this seems to be a fairly UK-specific issue, and most countries have seen inactivity rates resume a long-term downtrend as the Covid shock has faded.”

He added: “Recent ONS analysis confirmed that there’s no single condition that’s causing all this, though it’s hard to escape the conclusion that ballooning NHS waiting lists are a contributing factor.

“Those workers that have left a job due to illness are predominantly in lower-paid sectors and roles, most noticeably in consumer services.

“That suggests it may well be a contributing factor to the worker shortages we’re seeing in hospitality.”