Jobs recovery continues despite end of furloughon November 16, 2021 at 7:31 am

There were 160,000 more workers on payrolls in October than in September despite the end of the furlough scheme, official figures show.

Job vacancies also hit a fresh record high of 1.17 million in the three months to October as firms continued to struggle with worker shortages.

The UK economy is recovering from pandemic-era lows but inflation remains a concern.

The unemployment rate has fallen to 4.3%, near to its pre-pandemic level.

Sam Beckett, head of economic statistics at the Office for National Statistics (ONS), said: “It might take a few months to see the full impact of furlough coming to an end, as people who lost their jobs at the end of September could still be receiving redundancy pay.

“However, October’s early estimate shows the number of people on the payroll rose strongly on the month and stands well above its pre-pandemic level.”

She added: “There is also no sign of an upturn in redundancies and businesses tell us that only a very small proportion of their previously furloughed staff have been laid off.

“In addition, vacancies again reached a new record high.”

There had been fears the end of the furlough would lead to a spike in unemployment, but demand for workers has remained strong since the economy reopened.

October’s jobs data appears to increase the likelihood that the Bank of England will raise interest rates from their record lows before the end of the year, as it seeks to tame inflation.

Many analysts had expected the Bank to raise rates at its meeting earlier this month, but it chose to keep them on hold.

On Monday, Bank governor Andrew Bailey told MPs it had been waiting for official data on the impact of the end of furlough before it made a move.

Paul Dales, chief UK economist at Capital Economics, said: “Overall, it doesn’t look as though the labour market loosened much after the end of the furlough scheme.

“If the next labour market release on 14 December tells a similar story, we think that will be enough to prompt the Bank to raise interest rates from 0.10% to 0.25% at the meeting on 16 December.”