Box A: Measures of Labour Market Slack

Fergus Jimenez-England ()

National Institute UK Economic Outlook, 2024, issue 16, 15-24

Abstract: As the UK economy recovers from the aftermath of Covid-19 and the recent inflationary episode, we are confronted with a labour market whose unemployment rate is low and where year-on-year nominal wage growth remains elevated. The persistence of upward wage pressure has proved a stubborn problem for the Bank of England, which has cited persistent domestic inflationary pressure as one of the key factors behind their cautious approach to monetary easing. Therefore, current policy requires an accurate measure of labour market slack so that risks to wage inflation can be plausibly estimated. This box discusses the extent to which the unemployment rate and vacancy-to-unemployment ratio (V/U) can explain the level of wage inflation observed before and after the Covid-19 pandemic.

Date: 2024
References: Add references at CitEc
Citations:

Downloads: (external link)
https://www.niesr.ac.uk/publications/subdued-growt ... =uk-economic-outlook

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:nsr:niesra:i:16:y:2024:p:15-24

Access Statistics for this article

More articles in National Institute UK Economic Outlook from National Institute of Economic and Social Research 2 Dean Trench Street Smith Square London SW1P 3HE. Contact information at EDIRC.
Bibliographic data for series maintained by Library & Information Manager ().