Public opinion polls show that nearly half of young people in the UK feel deeply pessimistic about the future—how should we view this phenomenon? What changes has the UK undergone three years after Brexit?

On 31 January 2020, the UK formally left the European Union—exactly three years ago. Rather than benefiting from the so-called 'Brexit dividend,' the UK’s economy has instead suffered a severe blow, and its long-term competitiveness has been significantly undermined. By the end of September 2022, the UK was the only advanced economy among the G7 nations whose GDP had yet to recover to its pre-pandemic level (end of 2019). On 31 January, the International Monetary Fund stated that the UK’s economic outlook has remained bleak since October 2022, forecasting a 0.6% contraction for 2023—0.9 percentage points worse than its prediction three months earlier—leaving the UK at the bottom of the G7 in terms of economic performance. The UK’s central bank expects the country to suffer its worst economic recession since the 1920s over the next three years, with unemployment rising from its current 3.5% to 6.5%. In June 2022, research by the UK’s independent Resolution Foundation found that Brexit has placed downward pressure on British citizens’ purchasing power. Its impact has spread across other domains, inflicting heavy losses on UK households. The UK is confronting its worst inflation in 41 years—but businesses are unable to raise wages. This has triggered the largest wave of protests in four decades, with citizens demanding higher pay, while the government maintains that curbing inflation remains its top priority. Prime Minister Rishi Sunak introduced strict legislation restricting strikes—a move likely to intensify tensions between workers and the government, potentially catalysing broader social crises.

This week’s UK news roundup: Think tanks predict the UK economy will avoid recession this year and achieve growth! The UK government carries out a minor cabinet reshuffle.

According to a report by the UK’s Guardian newspaper, 58-year-old David Richards—a former general practitioner—now ranks among the youngest players of pickleball at the Wyre Forest Leisure Centre. Many older adults play there, ranging in age from 55 to over 80—reflecting a nationwide surge in early retirement since the pandemic. For Richards and many like him, the turbulence of recent years prompted a reassessment of personal priorities. ‘Workload and stress in general practice reached breaking point—and it was painful.’ He now spends his time playing pickleball and badminton, doing yoga and tai chi, and chatting with friends. ‘I’m lucky to have retired early—I want to start taking proper care of myself: losing weight, lowering my blood pressure.’ Since the pandemic, the number of economically inactive individuals aged 16–64 has surged dramatically—a trend largely driven by the wave of early retirements. Yet, amid growing concerns over labour shortages and an impending economic downturn, this trend has sounded alarm bells for the government. For many, this ‘inactivity’ is not a choice but a necessity. Millions have left the labour market due to long-term health conditions or caregiving responsibilities; underfunded care services and a collapsing healthcare system have only worsened the situation. Others have voluntarily withdrawn from work: many students have delayed entering the job market, while the number of retirees has surged to over 1.1 million. In Wyre Forest, the number of retirees has quadrupled over three years, reaching 5,200—nearly 10% of the local working-age population, compared to a national average of just 3%. Between the 2011 and 2021 censuses, the median age of Wyre Forest’s population rose by three years to 47—higher than the UK average. With no university campus and fewer employment opportunities than before, young people are leaving en masse, making it extremely difficult for local businesses to recruit staff. Yet Wyre Forest remains popular as a retirement destination—its proximity to Birmingham, abundance of cultural venues, convenience of restaurants and shops, and picturesque towns and countryside all contribute to its appeal. However, soaring energy bills and inflation exceeding 10% mean early retirement is unattainable for most. Official data shows the recent upward trend has reversed, suggesting some individuals are being drawn back into employment. The UK government is closely monitoring this shift. Given employers’ nationwide difficulties in recruiting sufficient staff, Employment and Pensions Secretary Mel Stride has launched an urgent review targeting labour-market challenges. The government hopes new policies will encourage those who exited the labour market during the pandemic to return to work. As previously reported by the Financial Times, the UK is the only advanced economy where employment levels remain below pre-pandemic figures at the start of this year. Labour shortages were highlighted by the IMF last week as one of the key adverse factors behind its sharp downward revision of the UK’s growth forecast. Earlier, Bank of England Deputy Governor Ben Broadbent noted that the UK’s relatively weak performance this year—compared with other economies—stems partly from its sluggish labour market. A tightening labour market is constraining the economy’s potential growth while exerting further upward pressure on private-sector costs.

Young People in UK Hit by 'Low-Gear Economy', Warns Bank of England Deputy

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Bank of England deputy warns youth unemployment is rising due to geopolitical conflict and energy price volatility, prompting potential interest rate hikes amidst a stagnant labor market.

theguardian

Young People in UK Hit by 'Low-Gear Economy', Warns Bank of England Deputy

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