uk application employment

Question 1

Summarise the current uk employment context

Answer 1

Unemployment is currencyly near the natural rate of unemployment and there is very little cyclical unemployment. The unemlopymnet seen in the Uk is mainly structural so that workers are immobile and unable to access the jobs available (possibly die to weak infrastructure and education 0 17th in the Pisa ranking). Wage growth of 6.6% shows that firms are facing higher costs and a wage price spiral may rake hold.

Question 2

Use the changes to the participation rate to evualte the current low levels of unemployment

Answer 2

A lower participation rate will result in a lower percentage rate of unemployment, ceteris paribus, even without increase employment levels. This is because the unemployment rate is a percentage of the labour force, which has fallen as the participation rate has fallen