Today’s ONS data show further improvement in the UK labour market. The number of vacancies across the UK during the three months to September climbed to a new record of 1.1 million. Payroll employment also hit a record at 29.2 million, gaining 207,000 in September.
Unemployment continued to nudge downwards to 4.5%, while redundancies showed no sign of an uptick as furlough drew to a close. Though we’ll have to wait and see the extent to which smaller firms have brought back staff, fallout from the end of the job retention scheme appears likely to be limited.
This tight labour market spells persistent worker shortages. Though both have been heading in the right direction, inactivity and overall employment (including self-employment) remain some way off pre-crisis levels. This won’t be solved simply by raising pay; more people need to be helped back into work including those who face various barriers to employment.