The United Kingdom is at risk of sliding into a “joblessness epidemic” unless urgent action is taken to reform welfare, skills and employment policies, the chief executive of Tesco has warned.

Ken Murphy, who leads the country’s largest private-sector employer, said Britain is “sleepwalking” into a situation where large numbers of working-age people are drifting out of the labour market, even as businesses face persistent staff shortages and rising costs.

He argued that current systems are failing both employers and individuals, leaving too many people disconnected from work and opportunity.

Murphy pointed to stubbornly high levels of economic inactivity among working-age adults, particularly those citing long-term sickness or a lack of suitable roles, as a growing structural challenge for the economy.

He said employers are increasingly struggling to recruit, while welfare and training systems do not do enough to encourage or support people back into employment.

According to Murphy, the result is a damaging mismatch that risks becoming entrenched if not addressed quickly, with serious implications for productivity, public finances and social cohesion.

The Tesco chief called for a more joined-up approach between government, employers and the education system, including better incentives to move from welfare into work, greater investment in skills and retraining, and more flexible roles for people with health conditions or caring responsibilities.

He emphasised that work remains one of the most effective routes to improving living standards and wellbeing, and warned that failing to act would leave Britain with a shrinking workforce and a growing dependency burden.

Murphy’s intervention adds to a wider debate among business leaders and economists about how to reverse labour market disengagement following the pandemic and cost-of-living pressures.

With major employers signalling concern about long-term workforce availability, the warning underscores mounting pressure on policymakers to confront joblessness before it becomes a defining economic problem.