John Lewis Partnership chair, Dame Sharon White, has blamed high wage inflation on the exodus from the workforce of workers aged over 50 during the pandemic.
White insisted the government must think “really hard” about how to encourage older workers to get back into jobs.
Approximately one million people, mostly in their 50s, left work since Covid-19 broke out, with the number of “economically inactive” – those without a job and not seeking one – being higher than pre-pandemic levels, according to data from the Office for National Statistics.
White commented: "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.
"There's not a business in the UK that's not finding it very difficult to recruit at the moment because there are so many more jobs and so far fewer people looking for work. It's a big issue.”
She suggested introducing flexible retirement plans coupled with skill courses for older employees as a potential method to encourage them back into the workforce.
Meanwhile, job vacancies have been at a record high and employers are constantly under pressure to hike wages to alleviate the impacts of inflation, which economists say, in turn, exacerbates the rising price issue further.
Inflation remains at 40-year highs, while the Bank of England tipped it to hit 13% and predicted the UK will enter a recession for five consecutive quarters from the last three months of the year.