Proactive Investors - The UK's employment figures may be underestimated by nearly one million, according to research by the Resolution Foundation think tank.
Official data from the Office for National Statistics (ONS) suggests high economic inactivity, but inaccuracies in its labour force survey may be overstating the problem.
The survey, which underpins employment statistics, has seen response rates drop to just 13% from nearly 40% before the pandemic.
The Resolution Foundation used payroll data to estimate that employment likely peaked in 2022-2023, with unemployment lower than the ONS’s reported 4.3%.
"The Government is soon to release its ‘Get Britain Working’ White Paper, which is expected to repeat the Government’s ambition to reach an 80% employment rate," said the report.
"But this goal only highlights the fact that we currently do not know what the UK’s employment rate actually is, due to problems with the Labour Force Survey (LFS).
"This issue has been ongoing for some time, with broad implications for UK economic policy making."
Bank of England Governor Andrew Bailey expressed concern, warning that flawed data hinders economic decision-making.
He also questioned the inactivity rates, suggesting the figures may misrepresent the true state of the labour market.