The post-pandemic jobs recovery continues to roll on and it now seems less likely that we will see significant unemployment once the furlough scheme comes to end.
Although there are fewer people in work than before Covid-19 struck in early 2020, job vacancies are at a record high and average weekly pay growth is rising faster than anticipated. Brexit and lockdown are combining to create labour shortages across the economy and this will feed its way into wages and prices.
This might seem like good news but rising wages coupled with rising prices just means we are all running faster to stand still. Inflation at 4% or 5% is not out of the question and we have a generation of customers who have never known the damage rising prices can inflict.
This is all likely to make the Bank of England nervous. The chickens of Quantitative Easing, lockdown and Brexit are all coming home to roost and they have quite a large bill in their beaks. The question is who is going to pay it?.
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