160,000 more workers brought into the UK labour market in October.
- In October 2021 there were 29.3 million employees, up 160,000 on the revised September 2021.
- The number of job vacancies in August to October 2021 continued to rise to a new record of 1,172,000, an increase of 388,000 from the pre-coronavirus pandemic January to March 2020 level, with 15 of the 18 industry sectors showing record highs.
- In July to September 2021, annual growth in average total pay (including bonuses) was 5.8% and regular pay (excluding bonuses) was 4.9%.
Myron Jobson, Personal Finance Campaigner, interactive investor, says: “Fears of an immediate spike in unemployment following the end of the furlough scheme - which supported millions of workers during the pandemic - were thankfully unfounded. But the ONS has recognised that it’ll take a few months before the full picture emerges as people who lost their jobs at the end of September could still be receiving redundancy pay.
“The employment story might not be as rosy as the figures suggest. Some furloughed workers might have returned to work but on a lower salary or reduced hours. What’s more, the employment figures are propped up by part-time work and those – typically young people - taking on roles with zero-hour contracts instead of pursuing careers.
“Job vacancies have also hit a new record high of 1.17 million as businesses both big and small continue to struggle to attract the right talent – which, in many cases, is underpinned by mismatch between skills supply and demand.
“The strength of the labour market is a key consideration which helps to guide the BoE’s thinking on interest rates. The strong employment numbers could be enough to convince policymakers to sanction the first increase in base rate in a while.”
Victoria Scholar, Head of Investment, interactive investor, says: “We are seeing the number of employees on companies’ books at a record high, despite the end of the furlough scheme, while job vacancies are also at all-time highs. On the plus side, there are plenty of job opportunities, which are set to rise in the run-up to the festive season, very low redundancy levels and the headline unemployment figure on a downward trajectory.
“However, the downside is that there are not enough workers, with fewer overseas job-seekers after the pandemic, skills shortages and supply struggling to keep up with demand amid a faster-than-expected post-Covid recovery. The tighter labour market continues to support an unsettling inflationary environment.
“By holding off from raising rates this month, it was clear the Bank of England wanted to see more data before jumping the gun with today’s employment figures helping to paint a clearer picture. Wages saw the smallest gain in five months but were still above expectations, pointing to ongoing price pressures. The central bank governor Andrew Bailey sounded his concerns just yesterday about the tightness of the labour market, which today’s data largely appears to confirm, increasing the chances of a rate hike sooner rather than later.
“The pound enjoyed a boost, thanks to the headline unemployment figure, which fell to 4.3%, just 0.3 percentage points above pre-pandemic levels, and ahead of analysts’ expectations, bringing forward rate hike expectations. GBP/USD has pushed back above $1.346, going against the downtrend that has been in play since the June peak, with losses having accelerated in recent weeks.”
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