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Mar 3 2017, 07:15 GMT
The recent sharp decline in the unemployment rate to 6.6% begs the question of how much further the recovery has left to run. We think there is still plenty of slack in the labour market. Employment is 5.4% below peak; net migration is now positive; and the participation rate is only beginning to recover. The sluggish recovery in the labour force in part explains the fall in the unemployment rate. Returning migrants will push up labour force participation and eventually slow the pace of decline in the unemployment rate. In short, we think the catch-up phase still has a couple of years left to run.