Young people in UK hit by ‘low-gear economy’, warns Bank of England deputy
Summary
Bank of England Deputy Governor Clare Lombardelli said uncertainty from the Iran conflict and higher energy prices is leading UK employers to delay hiring, leaving young people especially exposed. She said a further interest-rate rise in December is possible, depending on the conflict, energy prices and economic data.Key Facts
- Lombardelli described the UK labor market as a “low-gear economy,” with low hiring and few redundancies.
- She said new entrants to the labor market are being hurt because employers are postponing recruitment.
- UK unemployment rose to 4.7% this year, while youth unemployment reached its highest level outside the Covid pandemic since 2015.
- The number of young people not in education, employment or training has risen to almost one million.
- The Bank of England raised its base rate from 3.75% to 4%, with Lombardelli among the majority supporting the increase.
- Lombardelli said a further quarter-point rate rise at the Bank’s December meeting was possible, but that the decision would depend on economic developments.
- The article says UK employers are also facing higher costs, increased taxes and weaker consumer demand.
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