In recent news, official figures reveal that the unemployment rate has escalated to the highest level it’s been for two and a half years. The rate, now 4.4% from the previous 4.3%, is not only the highest since last year’s September but is also coupled with an increase in the inactivity rate, which reports show that 22.3% of working-age people are not actively seeking employment. Despite all these increases in unemployment, wage growth has remained robust, exhibiting an annual rate of 6%.
Despite the situation, figures such as earnings continue to show a rise faster than the rate of inflation, which indicates a level of sustainability in the economy. Nevertheless, the ONS report the labor market may be cooling, citing the falling number of vacancies and the rising numbers of unemployed individuals.
Pundits have gone ahead to preempt what they believe might be the fall out of this latest development. Some suggest that inflation could lead to an increase in property prices; others believe that people will keep their money, leading to further economic stagnation. At the same time, the government is expected to make some policy changes to cushion the economy and prevent further damage amid the ongoing Covid-19 crisis.
As the world continues to wonder what lies ahead with the pandemic, and how the economy can bounce back, the nations’ leaders are working on plans and strategies that can keep their economy afloat, mitigate unemployment rates, and avoid more economic damage
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