Jobless rate falls to 4.2% as number of workers on company payolls rises by 257,000
Last modified on Tue 14 Dec 2021 03.27 EST
Unemployment in the UK fell in October despite the end of the furlough scheme, according to official figures, as companies continued to hire amid record numbers of staff vacancies.
The Office for National Statistics said the unemployment rate fell to 4.2% in the three months to the end of October, representing about 1.4 million people, down from 4.3% in the three months to the end of September.
Reflecting a continued recovery in the labour market after the end of the Treasury’s multibillion-pound job support scheme in September, it said the number of workers on company payrolls rose by 257,000 in November from a month earlier to stand at 29.4 million – almost half a million higher than pre-Covid levels.
The ONS said it was likely that some furloughed workers could yet move into unemployment because they might be working out their notice periods, but that the early responses to its business surveys suggest the numbers being made redundant were likely to be small.
Darren Morgan, the director of economic statistics at the ONS, said: “With still no sign of the end of the furlough scheme hitting the number of jobs, the total of employees on payroll continued to grow strongly in November, although it could include people recently made redundant but still working out their notice.”
It comes as the Bank of England considers whether or not to raise interest rates on Thursday for the first time since the onset of the pandemic.
Threadneedle Street’s rate-setting monetary policy committee (MPC) unexpectedly held back from taking action last month, preferring to wait and see if the end of the furlough scheme had a significant impact on the jobs market.
However, analysts believe the emergence of the coronavirus Omicron variant will force the Bank to delay action this month amid rising concern over the worsening economic outlook.
Although the jobs market remained robust last month, economists warned that tougher government restrictions and a sharp rise in consumer caution in response to Omicron could damage the jobs recovery.
Suren Thiru, the head of economics at the British Chambers of Commerce, said the government needed to step in with emergency financial support for companies most affected by the government’s plan B restrictions.
“While current labour market trends provide no barrier to raising interest rates, uncertainty over the economic impact of the Omicron variant means a December rate hike is unlikely. Interest rates may start rising from February 2022, but only if concerns over the new variant have faded,” he added.
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