The labour market looks fairly flat overall, not surprising given the gloomy economic outlook. HMRC data show a worrying 90,000 drop in people working in retail and hospitality over the year, offset by a similar rise in workers in health and social care. This could suggest trouble ahead in sectors likely to be most affected by rises in the minimum wage and employers' National Insurance contributions. The Government's upcoming green paper on disability benefits needs to widen support beyond the one in ten out-of-work disabled people who get help to find work each year.

It is encouraging to see the number of people who are economically inactive continuing to fall, although at present these individuals appear to be swelling the ranks of the unemployed, rather than moving into work. An additional 838,000 people of working age were economically inactive in the October to December quarter of 2024 compared with the period immediately before the pandemic (December 2019 to February 2020) and nearly 2.0 million people who are economically inactive want a job. With some signs redundancies are on the rise, more support is needed to enable those who want to work to move into employment. This includes offering targeted assistance to close gaps in the employment rate between particular groups, including people with a disability and those from certain ethnic backgrounds.