the swedish times

You choose

When browsing the Swedish Times online, we utilize cookies along with our partners. Some cookies are essential for website functionality and cannot be disabled, while optional ones enhance your browsing experience and assist in supporting the Swedish Times. This is achieved in collaboration with 2 selected partners.When you make your choice, cookies and other similar technologies may be used to access personal data, including page visits and your IP address. We use this information about you, your devices and your online interactions with us to provide, analyse and improve our services, and depending on how you choose may also include personalising content or advertising.

You can withdraw your consent to the use of cookies at any time by following the link in our privacy policy, which can be found at the bottom of every page on the website. For more information, please see our cookie policy and GDPR policy.
Accept all cookies
Decline all cookies
Customize Cookies

High Immigration Levels Fail to Solve UK Labor Shortages and Inflation

Written by: Meredith Montgomery
Photo by: Ivan Bandura at Unsplash

Last update: 27 november 2023

SHARE: facebook cw1 facebook cw1 facebook cw1

The UK is seeing near-record levels of immigration, with 672,000 more people moving to the country than leaving in the year up to June. However, this influx of newcomers has failed to ease labor shortages contributing to inflation because most of them lack the skills needed by employers. Only one out of every five of these arrivals has come to work, while the majority consists of students, dependents, and refugees.

S&P Global, a credit ratings agency, predicts that this skill mismatch will keep the labor market tight until 2024, causing wages to continue rising and inflation to persist. Brexit has made the situation worse by introducing inefficiencies in the labor market, leading to more EU migrants leaving the UK than arriving.

The tight labor market has forced UK employers to offer higher wages to attract workers, which has raised concerns at the Bank of England about the risk of long-lasting high inflation. S&P Global anticipates that the Bank of England will lower interest rates in the latter half of 2024 to address this issue, with financial markets already pricing in the possibility of a rate cut in August.

This move comes despite some Bank of England officials expressing reservations about considering monetary policy easing at this stage. The UK government, under pressure to reduce immigration, faces the challenge of balancing immigration policies with the need for skilled workers to fill job vacancies.

Source: Bloomberg


Ad
Ad
Ad
cw1

Klädpressaregatan 1,
411 05 Göteborg
Sweden

editorial@theswedishtimes.se

Download the App
cw1 apple appstorecw1 apple appstore
Follow us


@ 2023 CW1 Inc. All rights reserved