On the positive side, demand for labour is still high, despite a deteriorating economic situation. Unemployment was very low in April at 3.8% and redundancies were also low.

The number of unfilled vacancies is remained at record levels and businesses in many industries report persistent labour shortages.

Less promisingly, the number of unfilled vacancies grew rapidly over H2 2021, but there are now signs that it is levelling off.

This might be interpreted as an early sign of economic weakness, with some employers reconsidering their hiring intentions.

At 32.9m, the number of employed people in March remained below the pre-COVID level, as did the employment rate.

It seems that many people – especially older people – left the workforce during the COVID pandemic and moved into “inactivity” (ie: not working and not seeking work).

Long-term ill-health is a key reason for increasing inactivity. The majority of those currently inactive (more than 80%) are not thought to be looking for work, according to ONS.

With demand for labour still outstripping supply, pay continues to grow strongly. In May, average total wages were up 4% year-on-year although this was still not enough to keep up with inflation, leaving most workers worse off in “real terms”.

It is also clear that pay performance varies widely. In May, pay for public sector workers was up 1.4% year-on-year, whilst pay in the private sector was up 4.5%, meaning that public sector workers are especially vulnerable to inflation pressure.

There are also differences between bonused and non-bonused workers, with bonused workers tending to do best.

This may mean an emerging difference based on job and class, since many of those receiving large bonuses work in highly skilled or highly qualified positions (eg: senior sales, financial services).