Employment, total hours worked and unemployment all tend to be highly persistent, so a rise in unemployment means – based on history – that it will be higher a year from now. That said, the UK labour market has adjusted relatively quickly to large shocks in the past (Broadbent, 2012). In normal times, around 9% of workers change jobs every year, but the tendency to persistence provides evidence from the past of the effects of a mismatch between the skills of job seekers and those required by hiring firms. As I noted earlier, some of the sectors hardest hit by the pandemic employ more young and low-skilled workers, who may find it hard to move between sectors (Haldane, 2020). That difficulty will be amplified if the jobs involve different tasks. Bank staff have analysed the task content of different jobs to quantify the extent of task reallocation required in various scenarios. In a relatively extreme scenario where the pattern of consumer spending is unchanged from 2020 Q3, staff estimate that the extent of the task reallocation over coming years would be higher than in the recent past, but much less than occurred during the 1980s and early 1990s. That was a period of 4  All speeches are available online at www.bankofengland.co.uk/news/speeches and @BoE_PressOffice  4  significant structural change during which the share of employees working in the manufacturing sector fell from 26% to 16%. There are two important points I would emphasise here.
This recognition of the uncertainty and risks around the recovery has been backed up by separate decisions the MPC took in February on the toolbox measures we can employ. We have been quite clear these toolkit 8  All speeches are available online at www.bankofengland.co.uk/news/speeches and @BoE_PressOffice  8  decisions should not be interpreted as a signal about the future path of monetary policy. We decided to ask the banks to make preparations within the next six months, in case we need to use negative interest rates to provide further support. This implies nothing about our intentions in that direction, and nor does it imply that negative rates are our chosen marginal policy tool, something that in my view is state contingent at all times. We also signalled that the Bank will do work on the approach it would take to tightening policy, should that be needed, again recognising that it has more than one tool to do so. These decisions are detached from our current or likely future policy decisions, but do recognise the increasingly two-sided nature of the risks we face, as we hope and expect to see the economy get over Covid.