Despite the end of the vacation plan, the number of employed persons in the UK has increased


Official data show that within a month after the end of the government’s holiday program, the number of British employees has increased, which will strengthen the Bank of England’s reason to raise interest rates as early as next month to control inflation.

The data released by the National Bureau of Statistics on Tuesday is the first conclusive evidence that the labor market has withstood the expiration of the wage subsidy program, which still supports more than 1 million jobs in the final weeks of September.

Between September and October, the number of paid employees increased by 160,000 to 29.3 million. Although the total for September was slightly lowered, the increase was strong.

This finding is consistent with early evidence from business investigations, which has shown that most workers on leave return to work in October, and only a small percentage are unemployed or choose to leave the workforce. Bank of England Governor Andrew Bailey told MPs on Monday that the unemployment rate looked “lower than our expectations.”

The line chart of the number of salaried employees in the UK (m) shows that UK employers added 160,000 workers in October

Labor market conditions will be a key factor guiding policymakers to make interest rate decisions at the December meeting, and the market is betting that the central bank will pull the trigger in the first interest rate hike since 2018. Bailey and Huw Pill, chief economist of the Bank of England, said on Monday that the uncertainty that may arise from the vacation is a key reason for the Monetary Policy Committee to postpone rate hikes this month.

Data from the UK National Bureau of Statistics also showed that in the three months ending in September, the employment rate averaged 75.4%, an increase of 0.4 percentage points from the previous quarter, while the unemployment rate fell by 0.5 percentage points to 4.3%-a drop larger than analysts. Expectations. Single-month data for September showed that the unemployment rate was as low as 4%.

There is also evidence that as workers take advantage of the active labor market, the UK is sharing the wave of resignations sweeping the US. The National Bureau of Statistics of the United Kingdom said that the change between positions reached a record high, which was driven by resignation rather than dismissal. In the three months ending in October, the number of job vacancies also hit a record high.

The Chancellor of the Exchequer, Rishi Sunak, stated that these figures “demonstrate the extraordinary success of the vacation plan”.

However, business groups said that labor shortages are putting economic recovery at risk, and the British Chamber of Commerce said that long-term staff shortages are “intensifying” and may force companies to “continue to decline in operating capabilities.”

Some analysts warn that workers on leave may return to work with less time and lower wages than they hoped, and a large part of the increase in employment is due to the increase in part-time jobs and young people working at zero interest rates. Hourly contract.

Samuel Tombs of Pantheon Macroeconomics, a consulting firm, points out that overall employment has not grown as fast as wage data suggests, because many people who were previously considered self-employed are now being paid.

But Tony Wilson, director of the Employment Research Institute, said: “We have never seen jobs faster than now… However, despite this, we still see labor shortages in all areas of the economy, and the job market is more than in the past 50 years. I get more nervous at any time.”

He added that the shortage is largely due to the increase in inactivity. Compared to the pre-pandemic trend, nearly 1 million people were unemployed-in the past year, unable to work due to early retirement and poor health. The number of people keeps increasing.

Gerwyn Davies, a consultant for the CIPD, a human resources professional agency, warned that because the EU and the supply of older workers are “stable at best,” rising inflation “may be combined with recruitment difficulties and have devastating effects”.

However, the UK’s National Bureau of Statistics data is not clear to what extent labor shortages have pushed up wages-this is a big problem for monetary policy makers, who want to prevent a temporary rise in inflation from turning into a continuous wage price spiral.

The National Bureau of Statistics of the United Kingdom’s overall measurement of weekly income growth excluding bonuses shows that in the three months ending in September, employees’ annual salary increased by 4.9%, which means that actual income has increased by 2.2%, which is higher than The growth rate before the pandemic.

The UK National Bureau of Statistics warned that this number has been distorted by temporary pandemic-related effects. The National Bureau of Statistics of the United Kingdom said that after adjusting for these factors, overall income growth may be “as low as 3.4%”-which means that income has exceeded inflation during the relevant period, but may lag behind the growth of the cost of living in the next few months.

The Monetary Policy Committee will be able to review employment data for another month before the next meeting in December, but analysts said that in accordance with current trends, the labor market will not become an obstacle to interest rate hikes.

Kitty Ussher, chief economist of the Institute of Directors, said: “There is nothing worth worrying about the Bank of England,” and Investec economist Philip Shaw said that these data “enhance the possibility of policy tightening next month.”

Paul Dales, chief UK economist at the consulting firm Capital Investment Macros, said: “Today’s release has lighted the bank, and the next labor market data released on December 14 may give it the green light to raise interest rates.”

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