-
Policy
Policy
Exclusive interviews with leading policymakers that convey the true policy message that impacts markets.
LATEST FROM POLICY: -
EM Policy
EM Policy
Exclusive interviews with leading policymakers that convey the true policy message that impacts markets.
LATEST FROM EM POLICY: -
G10 Markets
G10 Markets
Real-time insight on key fixed income and fx markets.
Launch MNI PodcastsFixed IncomeFI Markets AnalysisCentral Bank PreviewsFI PiFixed Income Technical AnalysisUS$ Credit Supply PipelineGilt Week AheadGlobal IssuanceEurozoneUKUSDeep DiveGlobal Issuance CalendarsEZ/UK Bond Auction CalendarEZ/UK T-bill Auction CalendarUS Treasury Auction CalendarPolitical RiskMNI Political Risk AnalysisMNI Political Risk - US Daily BriefMNI Political Risk - The week AheadElection Previews -
Emerging Markets
Emerging Markets
Real-time insight of emerging markets in CEMEA, Asia and LatAm region
-
Commodities
Commodities
Real-time insight of oil & gas markets
-
Credit
Credit
Real time insight of credit markets
-
Data
-
Global Macro
Global Macro
Actionable insight on monetary policy, balance sheet and inflation with focus on global issuance. Analysis on key political risk impacting the global markets.
Global MacroDM Central Bank PreviewsDM Central Bank ReviewsEM Central Bank PreviewsEM Central Bank ReviewsBalance Sheet AnalysisData AnalysisEurozone DataUK DataUS DataAPAC DataInflation InsightEmployment InsightGlobal IssuanceEurozoneUKUSDeep DiveGlobal Issuance Calendars EZ/UK Bond Auction Calendar EZ/UK T-bill Auction Calendar US Treasury Auction Calendar Chart Packs -
About Us
To read the full story
Sign up now for free trial access to this content.
Please enter your details below.
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
Real-time Actionable Insight
Get the latest on Central Bank Policy and FX & FI Markets to help inform both your strategic and tactical decision-making.
Free AccessMNI INTERVIEW: UK Labour Supply Hit Likely To Persist – IFS
An exodus of older workers from the UK labour force is likely to persist, tightening supply side constraints for an economy already facing high inflation and complicating Bank of England monetary policy, associate director at the Institute for Fiscal Studies Jonathan Cribb told MNI.
The UK workforce has shrunk by 450,000 since 2019, the last year before the start of the Covid pandemic, a fall described by BOE Governor Andrew Bailey as very large by historical standards, and an study IFS of survey data found that much of this shift was driven by early retirement. Past evidence shows that those who retire are unlikely to return to work, a troubling finding for the Treasury which faces a permanent loss of tax revenue and for the Bank of England as it considers how to respond to a tight labour market and surging inflation.
“If this was about labour demand, people losing their jobs in the pandemic, (if) they got a bit discouraged from looking for work, that would suggest that it would unwind itself a little more easily because of very high rates of vacancies,” Cribb said in an interview.
“The implication would be that there is a little bit less supply in the economy so what are you going to do about interest rates to balance aggregate demand and aggregate supply?” he added. (See MNI INTERVIEW:Shrinking UK Labour Pool Risks Wage Price Spiral)
PENSION POTS
Post-pandemic early retirement appears to be much more pronounced in the UK than in other advanced nations, with the number of economically inactive people jumping 3% since 2019, and 43% of this increase driven by changes among 50- to 69-year-olds. Cribb said this could be a product of changes to retirement rules allowing workers early access to pension pots.
“One potential reason why it could be different here to continental Europe is that we have … a more flexible pension and retirement income system. We rely a lot on private saving or private pension or occupational pensions … In places like France and Italy people’s pensions are almost entirely through the state and they have earnings related pensions there,” Cribb said.
“Historically, we would expect a lot of these changes would be permanent. Once people have left the labour force around these ages and retired, they might do a little bit of work here and there, but particularly not returning to a full-time job or even a concrete part-time job.”
This time, though, it is possible that high inflation may drive some retirees back to work.
“Very few people right now are very well inflation proofed,” Cribb said, noting that state pensions were uprated in line with consumer prices in September when the relevant rate was just 3.1% while the BOE now forecasts 11% inflation in October. Private pension incomes are also rarely inflation protected.
“Maybe that will mean some people will be encouraged back into work,” according to Cribb. “That said, lots of people in their 50s and 60s do have quite a lot of accumulated wealth and if they have decided their life is better off having a bit more leisure and not working maybe the change won’t be so big.”
To read the full story
Sign up now for free trial access to this content.
Please enter your details below.
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.