THE Bank of England yesterday blamed a surge in early retirement for our economic woes – and warned more interest rate rises might be needed.
Chief economist Huw Pill said there are around 600,000 fewer people in Britain’s labour force than they had anticipated.
This is putting pressure on employers to pay staff more despite a looming recession.
Mr Pill said: “That is a real shock to the economy, that is not something that monetary policy can prevent”.
The Institute for Fiscal Studies points to early retirement as a key factor depressing the number of workers, which has left businesses struggling to find the staff they need to fill vacancies.
Mr Pill said an economic slump is the way to bring down inflation in a crisis caused by shortages of energy, global food prices and a drop in the number of people in the UK who want to work.
Ha aggiunto: ‘We are entering a recession.’