Huw Pill said the departure of more than half a million workers from the jobs market since the Covid pandemic risked stoking inflationary pressures, long after the shock from sky-high energy prices is likely to fade.
In a speech to business leaders in London, he suggested the rise in economic inactivity – when working-age adults are not in a job or looking for one – could force a response from Threadneedle Street.
“Rising inactivity among the working age population represents an adverse supply shock, which adds to the difficult shorter-term trade-offs facing monetary policy,” he said.
