The first ONS figures for the post-furlough period suggest the UK labour market barely skipped a beat as the furlough scheme ended. Vacancies hit a new record at 1.17m and payrolls continued to climb in October.
The unemployment rate dropped to 4.3% in Q3 ahead of the scheme drawing to a close, with the single-month figure for September at just 3.9%. Redundancies also remained low. Meanwhile, a record number of people (nearly 2.2 million) started a new job over the quarter. Both inflows into employment and job-to-job moves are above pre-pandemic levels.
While rosy from a workers’ perspective, things are more challenging for employers. They now face the tightest labour market on record. Those trying to recruit are facing increasingly fierce competition from other employers who are also fighting to woo the people they need to grow. This could soon start to hold back the recovery.
Despite all the positive developments in the labour market, there are still half a million fewer people in work than before the pandemic and inactivity remains high. Helping older people, disadvantaged groups and those who face barriers to employment get back into work needs to be the focus.