All #UK Stories

It’s been a turbulent week for the United Kingdom. Puzzling financial policy and political drama latched onto an ongoing energy crisis and a tight labour market, triggering volatility not seen in at least 20 years. 

Countries across the world are facing high inflation, economic fallout from a pandemic, and an energy crisis caused by the war in Ukraine.

Demand for workers is about 60% above its pre-COVID level. The paradox is that while the U.K. labour market is extremely ‘tight’ – a good thing for workers – those same workers are suffering from a cost of living crisis.

How does economic growth happen? It’s a hard question to answer but economists have tried for centuries. Perhaps the most famous model came from MIT economist Robert Solow in 1956. The Solow growth model specifies three factors that fuel growth: productivity, capital, and labor. 

Employers face stiff competition for workers amid labour shortages.