UK living standards face squeeze despite strong jobs market

Analysis: Higher prices, taxes and energy costs will bring gloom despite low level of unemployment

Demand for workers is strong as the UK economy emerges from two years of pandemic-induced disruption. The supply of workers has been reduced by an increase in long-term sickness affecting mainly the over 50 age group.

As a result, there is enough upward pressure on pay to persuade the Bank of England to continue raising interest rates, but the big squeeze on living standards has begun.