The UK’s flexible labour market needs to be allowed to do its job

Plain-speaking Economics

The Treasury is right to begin to wind down the furlough scheme – and not a moment too soon. The UK economy is springing back to life and the labour market is not far behind.

It will take a while for this to be confirmed in the official data. We still only have the headline numbers for unemployment in April and some early estimates of payroll employment in May. But these show that the unemployment rate has levelled out below 5% (some had feared it could be as high as 10%), and that the economy is rapidly regaining the jobs lost last year.

The more timely business surveys and ‘faster indicators’ are even more encouraging. For example, the KPMG and REC Report on Jobs showed that recruitment surged again in June, with other sources confirming that vacancies and online job ads are hitting new highs.

Indeed, many sectors are…

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