Employment above pre-pandemic levels: Bank of England unemployment fears were unfounded, so now it has a whole new headache

The number of employees was up 257,000 in the month to 29.4 million in November. That’s 424,000 higher than pre-pandemic levels.

The employment rate August-October was 75.5%, 1.1 percentage points above pre-pandemic levels.

Job vacancies hit a record high of 1.219 million in August-October, up 434,500 from before the pandemic.

The unemployment rate was 4.2%, up 0.2 percentage points from pre-pandemic levels, but down 0.4 percentage points from the previous quarter.

The redundancy rate rose slightly to 3.5 per thousand in August-October, up 0.1 per thousand in the quarter, but below pre-pandemic levels.

The ONS has released employment and wage data for the three months August-October: UK labour market: December 2021 – Office for National Statistics (ons.gov.uk)

Sarah Coles, senior personal finance analyst, Hargreaves Lansdown: “The Bank of England’s fears of a post-furlough redundancy spike completely failed to materialise. In the three months to October, employment rose above its pre-pandemic levels, the claimant count continued to fall, long-term unemployment dropped for the first time since May last year, and job vacancies hit another record high. Unfortunately, now the Bank has something else to worry about.

“We’re not entirely out of the woods just yet, because some of those made redundant at the end of the scheme could be working their notice periods. The number of vacancies is also slowing, and single month figures for October saw the first fall since February. However, the ONS business survey continues to show that only a small proportion of those on furlough at the end of the scheme had been made redundant, so we may not see anything significant in the coming months.

“This gives the Bank of England a completely different and equally painful headache. On the one hand, it left rates untouched last month, specifically because it was concerned about the risk of unemployment. These fears have been allayed, and in the interim inflation has hit 4.2% and  wage inflation is still running well above 4%. But on the other hand a month is a long time during a pandemic and disappointing growth figures combined with growing fears of Omicron running rampant means it now has to worry about the fact that the fragile economy may not withstand a rate rise.”

Other figures from the release

  • The bulk of the growth in employment came from part-time workers.
  • Total pay (including bonuses) grew 4.9% in the year to August-October and regular pay 4.3%. These numbers have been falling as the impact of furlough on figures a year earlier has dropped away.