15 Feb, 2022

Labour market overview, UK

15 Feb, 2022

Our latest Labour Force Survey (LFS) estimates for October to December 2021 show a continuing recovery in the labour market, with a quarterly increase in the employment rate and a decrease in the unemployment rate. However, economic inactivity has increased slightly on the quarter.

The UK employment rate increased by 0.1 percentage points on the quarter to 75.5%. The number of self-employed workers remains low following decreases seen during the coronavirus (COVID-19) pandemic, however the number of employees increased on the quarter to another record high. Job-to-job moves reached record numbers in October to December 2021, driven by resignations.

Our most timely estimate of payrolled employees shows another monthly increase (up 108,000) in January 2022 to a record 29.5 million.

The unemployment rate decreased by 0.2 percentage points on the quarter to 4.1%, while the economic inactivity rate increased by 0.1 percentage points to 21.2%. The increase in economic inactivity since the start of the coronavirus pandemic was largely driven by those who are economically inactive because they are students or for “other” reasons. In the latest three-month period however, those who are inactive because they are students continued to decrease, while the increase was driven by those who are inactive because of long-term sickness and “other” reasons.

The number of job vacancies in November 2021 to January 2022 rose to a new record of 1,298,400, an increase of 513,700 from its pre-coronavirus January to March 2020 level. However, the rate of growth in vacancies continued to slow down. The ratio of vacancies to every 100 employee jobs continued to rise, reaching a record high of 4.3 in November 2021 to January 2022, with the majority of industry sectors displaying record high ratios.

Growth in average total pay (including bonuses) was 4.3% and growth in regular pay (excluding bonuses) was 3.7% among employees in October to December 2021. In real terms (adjusted for inflation), total and regular pay fell on the year at negative 0.1% for total pay and negative 0.8% for regular pay. Previous months’ strong growth rates were affected upwards by base and compositional effects. These temporary factors have largely worked their way out of the latest growth rates, however, a small amount of base effect for certain sectors may still be present.

Credit: https://www.ons.gov.uk/