Business News Round Up (12/10/2021)
UK job vacancies hit record 1.1m as labour market tightens
Britain’s labour market is now at its tightest in more than four decades, with fewer unemployed people for each job vacancy than before the pandemic, according to the latest official figures. The Office for National Statistics said on Tuesday that the number of open jobs rose to a record high of 1.1m in the three months to August, while the average unemployment rate for the period fell to 4.5 per cent, from 4.9 per cent in the previous three-month period. The vacancies matched or exceeded pre-pandemic levels in all sectors and come as Bank of England policymakers grow concerned about building inflationary pressures in an economy grappling with supply chain disruptions and rising energy costs. The increase in vacancies means the ratio of jobless people to open jobs — which rose to 4.1 at the peak of the pandemic — stood at 1.45, below its pre-pandemic level and lower than at any point in 40 years. The data also showed a rise in the employment rate, a drop in the economic inactivity rate and a fall in redundancies, which had returned to pre-pandemic levels.
https://www.ft.com/content/463f4fbd-3a50-45b5-891c-5cb5ba623df8
Northern Powerhouse Rail predicted to provide £22bn boost to economy
A new report has revealed that one key section of Northern Powerhouse Rail alone could deliver a £22bn boost to the Northern economy by 2060 – nearly £8bn more than previously forecast. The new research which has been unveiled by Mott MacDonald and the Northern Powerhouse Partnership shows that a new high-speed rail link between Leeds, Bradford and Manchester could potentially increase productivity by 6% (equivalent to £16.5bn), raise the employment rate by 1.5% (equivalent to £5.5bn), and increase GVA in the North by about 8% over a decade. The document also says that traditional cost-benefit analysis, has failed to recognise the true economic potential of the Northern Powerhouse Rail (NPR) development, a project which if given the green light by Government to include a new stop in Bradford, would act as a platform for the city’s regeneration. It argues that if simultaneous action across skills, planning, utility provision, education, tourism, leisure, and industrial policy is taken into account, billions more could be added to the Northern economy through delivery of NPR.
UK economic outlook: the future isn’t what it used to be
The UK’s economic recovery from the COVID-19 pandemic has so far proven rapid but incomplete and remains contorted by sectoral and regional imbalances. Over the winter, we expect a combination of lingering public health concerns, income losses and supply impairments to all drive a further fading of growth momentum. A sustained and complete recovery remains, in our view, far from secure. Much will depend on the labour market. In this chapter, we assess the outlook for the UK economy and the (many) challenges ahead. A profound economic adjustment now looms. Many of the changes in patterns of household consumption during the pandemic appear increasingly persistent, and many firms now seem to be expecting and preparing for a different economy in the years ahead. Brexit compounds this challenge: early evidence points to the beginning of a period of acute structural change within UK trade. Inflation is set to increase sharply in the second half of 2021, with annual CPI forecast to peak at 4.6% in April 2022. But accelerating inflation is currently being driven by just a handful of primarily imported goods, with services inflation, in particular, more subdued. The risks of a more persistent domestically driven price surge for now seem contained – but inflation expectations are a concern. On balance, though, our view is that inflationary pressures should abate, and monetary and fiscal policy need, for now, to keep supporting the recovery.
https://ifs.org.uk/publications/15691
UK night-time economy lost 86,000 jobs during COVID shutdown, says new NTIA report
Around 86,000 jobs were lost in the UK’s night-time cultural economy as a result of the COVID pandemic, according to new research published today by the Nighttime Industries Association. The trade group also makes a number of demands of the UK government to protect a sector which, it says, accounted for 1.6% of the country’s GDP prior to the COVID shutdown. The new report from the NTIA seeks to quantify the economic impact of the wider night-time economy – and specifically the night-time cultural economy, so night-time businesses driven by cultural and leisure activities – prior to COVID-19 and the lockdown measures that forced many of those companies to shut down completely and/or operate at limited capacity over a sixteen month period. It then also looks at the impact those lockdown measures have had and the challenges ahead as the night-time sector slowly swings back into action. According to the group’s figures, the value of the UK’s night-time cultural economy in 2019 was £36.4 billion – or 1.6% of GDP – and the sector also generated 425,000 jobs. Since the sector’s 2019 high, some 86,000 jobs have been lost, it then states.