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Payrolled workers surge above pre-pandemic levels after record leap – ONS

·3-min read

The number of UK workers on company payrolls has surged above pre-pandemic levels after a record jump in September, as vacancies also hit another new high.

The Office for National Statistics (ONS) said the number of payrolled workers rose by 207,000 between August and September to a record 29.2 million.

This was 122,000 higher than levels seen before the pandemic struck in February 2020.

Unemployment rate graphic
(PA Graphics)

The ONS figures showed the rate of unemployment fall further to 4.5% between June and August, down from 4.6% in the quarter to July and the lowest level for a year, the ONS added.

The data also showed another record leap in job vacancies, estimated to be up by nearly 1.2 million in September.

Britain’s jobs market rebound has sparked speculation that the Bank of England may raise interest rates faster than expected, as it looks to cool soaring inflation, with fewer unemployment fears to hold it back.

While furlough came to a close at the end of last month, the data showed vacancies almost matching those left on the support scheme, raising hopes the UK will avoid any spike in unemployment.

Darren Morgan, director of economic statistics at the ONS, said: “The jobs market has continued to recover from the effects of the coronavirus, with the number of employees on payroll in September now well exceeding pre-pandemic levels.

Pay growth v Inflation graphic
(PA Graphics)

“Vacancies also reached a new one-month record in September, at nearly 1.2 million, with our latest estimates suggesting that all industries have at least as many jobs on offer now as before the onset of Covid-19.”

But the ONS flagged the impact of the mounting recruitment crisis in the UK, with vacancies rising 318,000 above levels seen before Covid and recent analysis showing a raft of sectors struggling to fill posts.

The hospitality sector is finding it the most difficult to recruit, according to the ONS, with nearly a third (30%) saying it is harder than normal to fill vacancies.

In another sign of the buoyant recruitment market, the ONS said the biggest rise in vacancies was seen in the administration and support sector, in particular temporary employment agencies, with a 165,000 increase.

Hospitality firms were looking to fill 32,000 jobs in September.

UK job vacancies graphic
(PA Graphics)

Chancellor Rishi Sunak said: “As we move to the next stage of our support, it’s encouraging to see our Plan for Jobs working – the number of expected redundancies remained very low in September, there are more employees on payrolls than ever before and the unemployment rate has fallen for eight months in a row.”

The figures showed unemployment fell 126,000 in the quarter to August to 1.5 million, while employment rose 235,000 to 32.4 million.

Wages enjoyed another steep rise, with average weekly earnings up 7.2% with bonuses or 6% without bonuses, in the three months to August.

But the ONS stressed that the earnings figures continue to be skewed by certain factors, with lower-paid jobs being hit hardest by the pandemic.

Financial markets are now pricing in a rate rise by the end of the year, although many economists think 2022 will see the first move.

Samuel Tombs at Pantheon Macroeconomics said the labour bounce-back was “not strong enough for the Monetary Policy Committee to hike rates in November, before it has assessed the post-furlough landscape.”

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