UK employment increases despite end of mining scheme
Employment in the UK rose in October despite the government ending its coronavirus-killing plan, according to official data confirming the strength of the labor market before the arrival of the Omicron variant.
The Office for National Statistics on Tuesday said the employment rate rose to 75.5% in the three months to October, up 0.2 percentage points from the previous quarter, driven by an increase in part-time work. period, which has plummeted during the pandemic. .
The unemployment rate fell to 4.2%, in line with analyst expectations. More timely administrative data showed payroll employment also continued to grow in November. The ONS said it’s still possible people left over when the furlough scheme ends are making their announcements, but so far the amount surplus remains below pre-pandemic levels.
“There is little doubt in anyone’s mind right now that the labor market is getting tighter than ever,” said Kitty Ussher, chief economist at the Institute of Directors. Chief economist at the Institute of Directors, adds that the main concern is the increase in economic inactivity among people of working age. by long-term illness.
Data showed vacancies hit a new record high, of more than 1.2 million, in the three months to November, although there were also first hints that an uptick in hiring could begin. fell, with the single month estimate for November showing a decrease in vacancies since February.
Wage growth also remained strong. The ONS’s headline measure of average weekly earnings, excluding bonuses, showed annual pay growth at 4.3% in the three months to October, with gross pay growth at 4.3%. 9%. The ONS said pandemic-related distortions to the data have largely extended beyond the metrics but could still affect certain sectors.
Evidence that the labor market has passed the last stage of wage subsidies has previously been seen as the final piece in the puzzle for the Bank of England policymakers, who have signaled that interest rates will need to increase to contain inflation but want to confirm that economic recovery. on the right track before making the first move to tighten policy.
But most analysts now think that policymakers won’t change rates when they meet this weekend and will delay until the new year to assess the spread of Omicron and the release of new policies. How severely the new restrictions could affect economic activity.
Suren Thiru, chief economist at the British Chambers of Commerce, said while the labor market trend was “no barrier to a rate hike”, the government’s decision to move to a “plan B” to curb the spread of Omicron which can damage jobs. recovery, tightening recruitment in the hotel and retail sectors.
Rishi Sunak, UK prime minister, said the job outlook remained stable and the government would continue to “react proportionately” to the changing path of the virus.
But Matthew Percival, employment director for employers’ organization CBI, said continued difficulties in hiring, combined with the emergence of Omicron, means businesses face a “challenging winter” and additional support may be needed for the hardest-hit new sectors. coronavirus restrictions.
Samuel Tombs, at the macroeconomic consulting firm Pantheon, said the data “probably was strong enough to convince [monetary policy committee] to raise bank rates at this week’s meeting, if Omicron didn’t show up.” But he added that this variation could affect employment in consumer services, as businesses adjust “to the idea that variations will emerge and come into play over the next few years, linked continue to meet demand”.