UK face worst labor shortage on record
British companies are facing the most severe shortage of job candidates on record due to an exodus of overseas workers caused by the lockdowns and Brexit. The looming crisis in the labor market may cripple the economic recovery. Even the easing of quarantine restrictions failed to brighten the situation.
Interestingly, the economic revival in the UK that began quite buoyantly slowed down sharply because of the labor market’s woes. Most of the migrant workers had to leave the country. As a result, it triggered candidate shortages that plagued businesses. The government removed restrictions in an attempt to boost the economy. However, this measure could not help offset the shortage of workers. According to the Office for National Statistics, the gross domestic product grew by just 0.1% in July compared to the previous month. It was a sharp slowdown after June's rise of 1%. The service sector, which accounts for 80% of the economy, showed no growth on a monthly basis.
The Confederation of British Industry (CBI) called on the government to soften the rules of migration to the UK. "To help ease these pressures, temporary, targeted interventions are needed to enable businesses to keep their doors open, " Alpesh Paleja, the lead economist at the CBI lobby group, said. Bridget Phillipson, the shadow chief secretary to the Treasury, argues that the government’s indecisiveness is holding back the recovery. "The concerning figures today show that just as the UK economy ought to be getting back to normal, disruption to supply chains and other shortages mean our recovery is hitting the brakes," she noted.