John Lewis head Dame Sharon White has urged the government to encourage lockdown retirees back into work to avoid stagflation.
The retail chief warned that ministers should address labour shortages in order to prevent the economic situation from worsening, in an interview with BBC on Tuesday morning.
“There’s not a business in the UK that’s not finding it very difficult to recruit at the moment,” she said, pointing to a huge gap in vacancies and people searching for work.
“I’ve never seen anything quite like the economic environment we have at the moment,” she said.
A looming concern for the country was “inflation combined with low growth, low productivity,” Dame White said. “So I think the big focus for all of us is how do we avoid stagflation?”
Businesses must start investing in order to “avoid the UK becoming Japan with very low, very persistently low rates of productivity and very low persistent rates of growth,” she said.
Individuals who retired amid Covid lockdowns, including many people in their 50s, should be encouraged back into work to help ease the economic situation, she said.
“Regardless of what has happened coming out of Covid, if the labour market is that tight, if we continue to have far fewer people in work, looking for work – you’ve inevitably got more inflation and more wage inflation,” she added.
It comes as the Office for National Statistics revealed that the number of economically inactive people – who do not have a job and are not looking for one – is higher than pre-pandemic times.
“A million people out of the labour market has got profound, long-term, systemic implications and I would like there to be more of a debate, more of an open debate and certainly more of a debate between business and government,” Dame White said.