Over 21% of UK adults are not workforce engaged

More than 20% of working-age adults in the UK are not in work or searching for jobs, according to official figures. The economic inactivity rate is currently at 21.5% for the three months ending in January. This is a decrease from previous quarters and last year. However, it remains a concern as the government aims to improve economic growth. The government recently announced plans to cut sickness and disability benefits. This has led to increased attention on the number of people not looking for work. Chancellor Rachel Reeves is set to present an update on her economic plans during the upcoming Spring Statement. The Office for National Statistics (ONS) advises caution when interpreting job figures due to low survey response rates. Despite this, ONS reports that economic inactivity has generally decreased since records began in 1971. It rose during the Covid pandemic but has since fluctuated. Over the past year, economic inactivity has fallen by 0.6% across all age groups thanks to more individuals aged 35 to 49 seeking employment. In terms of pay, the ONS noted that wages have been growing faster than inflation. Excluding bonuses, wages increased by 5.9% compared to last year. Sectors like retail, hospitality, and construction have seen notable pay growth. The Bank of England monitors this data closely as it prepares to announce its latest interest rate decision, which is expected to remain at 4.5%.