UK unemployment rate falls amid August hiring spree
The UK unemployment rate fell 0.3 per cent in the last quarter as businesses continued on a hiring spree to keep pace with the economic recovery from the pandemic.
According to the Office of National Statistics, the unemployment rate now stands at 4.6 per cent, in line with economists’ forecasts.
The fall was powered by a record August for hiring, with 241,000 employees added to payrolls last month.
In total there are now 29.1m people on company payrolls, higher than in February 2020, before Covid-19 struck.
However, London, Scotland and South East are still not yet back to pre-pandemic employment levels.
In a sign that hiring will likely continue apace, there are now over 1m current vacancies for the first time since records began.
But there were warnings that the ending of the furlough scheme this month could throw the labour market into reverse.
Chancellor of the Exchequer, Rishi Sunak said: “Today’s statistics show that our Plan for Jobs is working – the unemployment rate has fallen for 7 months in a row, the number of employees on payrolls is back above pre-pandemic levels and there were fewer potential redundancies notified in August than at any point since the start of last year.
“As we continue to recover from the pandemic, our focus remains on creating opportunities and supporting people’s jobs.”
KPMG chief economist Yael Selfin said that though more people would be looking to return to work in the coming months as the furlough scheme ends, there could be yet more pain in store.
“The market is set to remain choppy with vacancies taking time to fill due to skills shortages and reduced availability of overseas workers”, she said.
Kitty Ussher, chief economist at the Institute of Directors, said that the pressure was now on the government to show that it could fill the gaps left by such shortages by investing in its domestic workforce.
“The economy is now well-prepared for the end of furlough, with unemployment demonstrating a clear downward trend and the highest level of vacancies in the economy since records began”, she said.
“The government now needs urgently to roll out and ramp up lifelong opportunities to retrain, including widening the scope of training provided through the apprenticeship levy.”