Recent Developments in the UK Labour Market

15 Pages Posted: 9 Apr 2007


In this speech, Professor David Blanchflower, member of the Monetary Policy Committee (MPC), of recent developments in the UK labour market on the wider economy and monetary policy. He argues that the equilibrium or natural rate of unemployment has fallen over the past decade, and posits a number of possible explanations, including changes in demographics and work patterns, and declining union membership. He argues that a fall in the natural rate would suggest there is currently a significant degree of slack in the labour market, and that wage growth should therefore remain benign in the near term — consistent with inflation returning to target by early Summer 2007.

Suggested Citation

Blanchflower, David, Recent Developments in the UK Labour Market. Bank of England Quarterly Bulletin 2007 Q1, Available at SSRN:

David Blanchflower (Contact Author)

Bank of England ( email )

Threadneedle Street
London, EC2R 8AH
United Kingdom