The Stagflationary Wind Blowing Through the UK Economy

Today’s faster-than-expected cooling in the UK labor market follows the higher-than-anticipated inflation data reported earlier this week (please see previous post on this).

The rise in unemployment, declining job vacancies, and softening wage growth are being driven by two primary factors: Policy choices and sequencing, and global uncertainty which is prompting businesses to adopt a wait-and-see stance, delaying some hiring and investment decisions.

These developments underscore a message I have emphasized repeatedly—most recently in last week’s Financial Times column:

The UK government must act more boldly to implement productivity-enhancing, pro-growth measures, while also improving its effectiveness in securing private sector participation and support.

#economy #growth #inflation #markets