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Following a 17.8% decrease in August 2024, profits in September 2024 plummeted by 27.1% from the previous year, reportedly the most significant drop since the 34.9% decline in March 2020, according to analysis.
In response, Chinese officials have intensified efforts to stimulate growth.
The economic inactivity rate during the period from November 2023 to January 2024 stood at 21.8%, a slight increase compared to the previous year. This means that approximately 9.2 million people aged between 16 and 64 are neither employed nor actively searching for jobs. The total figure has risen by over 700,000 since before the onset of the coronavirus pandemic.
Long-Term Illness: Approximately one-third of the working-age population not participating in the labour force cite long-term illness as the primary reason for their inactivity. Health-related issues have kept a significant portion of the population away from work.
The pandemic: of 2020 caused work flight. 700,000 extra out of the workplace since the coronavirus pandemic Covid 19 hit the UK in 2020.
Students and Education: Students pursuing education are often classified as economically inactive. Their focus on studies and lack of job-seeking activity contribute to this category.
Care Responsibilities: Individuals who care for family members or manage household responsibilities fall into this bracket. Caring duties can be time-consuming and prevent active job hunting.
People with Disabilities: Those with disabilities may face barriers in accessing employment opportunities. Accommodations and inclusive policies are essential to address this issue.
Early Retirement: Some adults choose early retirement, and once retired, they rarely express a desire to return to work. This group contributes significantly to the inactive population.
Discouraged Workers: Individuals who have given up on job searches due to discouragement or lack of suitable opportunities are also part of this category.
Gender Gap: Historically, more women have been classified as economically inactive compared to men. However, this gap has narrowed over the years as more women have entered the workforce.
Age Trends: Recent data indicates that while the number of economically inactive individuals due to illness has decreased, there has been an increase among those aged 16 to 34. Mental health issues are believed to be a contributing factor in this age group.
The persistently high level of economic inactivity poses challenges for the UK economy. As the country emerges from the pandemic, addressing workforce shortages becomes crucial. Measures such as reducing National Insurance Contributions and extending free childcare services aim to encourage people to seek employment or increase their working hours.
More effort is needed to further incentivise workforce participation, if not, the UK economy will suffer for many more years than would otherwise be necessary.
Economists had forecast a slight fall but unexpected rises in alcohol and tobacco prices were behind the surprise rise.
However, with energy bills predicted to come down in 2024, there are still expectations of interest rate cuts later this year.
As we have seen in the Germany, the U.S., and France, inflation does not fall in a straight line, ‘but our plan is working and we should stick to it,‘ Jeremy Hunt reportedly said in a statement.
Increases in the cost of energy and food costs, started by pandemic lockdowns ending exasperated further by Russia’s invasion of Ukraine and more recently the conflict in Israel have put household finances under extreme pressure.
The UK and other countries were woefully underprepared for all of these events as they ‘began’ and at the ‘end’. We did not prepare to come out of them – there was no exit plan!
Markets and traders are still expecting BoE to cut its base rate in 2024 due to the fast-falling inflation rate. It peaked at 11.1% in October 2022 – and now sits at 4%.
The question is: will the economic recovery be good enough to allow the Bank of England to start cutting rates?
The UK interest rate currently sits at 5.25%.
