LONDON – British employers added a record 241,000 employees last month, raising the total number of employees on the company’s payroll above the level just before Britain went into COVID-19 lockdown last year, official data showed on Tuesday.
The strong jobs data comes as Britain’s government prepares to end its holiday program on 30 September, which helped nearly a third of its workforce, and last month still supported nearly 700,000 workers full-time. Had been.
Tuesday’s figures indicate a reversal from weak economic data from July, when Britain’s recovery slowed as hundreds of thousands of workers were forced to stay at home after reports of contact with people who tested positive for COVID-19 had tested positive.
British government bond yields rose after data – with the two-year benchmark touching their highest level since the start of the pandemic – as data about whether the Bank of England could start raising interest rates revived.
Businesses reported more than 1 million vacancies in the three months to August—an all-time high, and the unemployment rate fell to 4.6 percent in the three months to July, the Office for National Statistics said, in line with economists’ expectations of a Reuters poll.
“The latest data further indicated that the labor market is declining sharply and labor shortages are contributing to the rapid underlying wage growth,” said Ruth Gregory, economist at Capital Economics.
During the three months to July, the number of people in employment, including the self-employed as well as employees, rose from 183,000 to 32.4 million, roughly in line with forecasts.
“Today’s figures show that our plan for jobs is working,” Finance Minister Rishi Sunak said.
The number of people working on this comprehensive measure was still well below the record 33.1 million just before the pandemic. Fewer people are self-employed and more report being unemployed or “inactive” – a category that includes many students, homemakers and those no longer looking for work.
Businesses reported 1.034 million vacancies in the three months to August, the most since these records began in 2001.
Vacancies were particularly high in sectors such as housing and food services, which laid off many workers last year, but have seen a pick-up in demand in recent months as COVID-19 restrictions are eased.
Shortages of key workers such as truck drivers and food processing workers have led to temporary gaps in some supermarket shelves and restaurant menus.
“The ongoing supply and labor shortage is hindering further growth,” said Matthew Percival, director of people and skills at the Confederation of British Industry.
The CBI and other business groups have been calling on the government to temporarily relax new post-Brexit immigration rules while they train new workers.
Businesses have reported a sharp increase in wage pressure. Tuesday’s official data showed average weekly earnings in the three months to July were up 8.3 percent from a year ago, down from an all-time high of 8.8 percent for the three months to July.
The ONS said these huge increases should not be taken at face value because low-wage jobs were more likely to be cut in the past year, and fewer people were now on lower wages.
Salaries excluding bonuses rose 6.8 percent annually in the three months to July, and the ONS said the real underlying rate was probably somewhere between 3.6 percent and 5.1 percent—still higher by pre-pandemic standards.
The UK job market presents a challenge for the BoE as it tries to gauge how inflationary pressures and supply-chain bottlenecks can persist.
Last month, half of BoE policymakers decided that some basic conditions for rate hikes had already been met, but others insisted the job market was still sorely lacking.
Gregory of Capital Economics said he expects the labor shortage to be temporary.
“The danger is that they remain in place longer than we expected, leaving inflation high and the Bank of England pulling the interest rate trigger next year,” he said.
The first rate saw the price of financial markets rise from 0.1 percent to 0.25 percent by May, while economists surveyed by Reuters saw an average of one by the end of 2022.
by David Milliken and Andy Bruce
This News Originally From – The Epoch Times