LONDON: The number of job vacancies in the UK hit a record high of 1.2 million in September as Britain grapples with a chronic labour shortage.
British companies pushed the number of workers on payrolls above pre-pandemic levels last month, with a rise of 207,000 taking the total to a record 29.2 million in September, according to the Office of National Statistics, report agencies.
Chancellor of the Exchequer Rishi Sunak described the employment landscape as “encouraging” as the government moved into the next stage of its Job Support Programme.
“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 8 months in a row,” Mr Sunak said.
Earlier this month, the Treasury committed an extra £500 million in fresh job support funding, with a focus on getting people into new or better jobs.
Britain’s labour market has been plunged into the spotlight in recent weeks, as a number of high-profile shortages in key areas led to supply chain chaos and concerns of a spiral in wages and prices.
Looking at the quarterly figures, vacancies hit 1.1 million between July and September, with the retail sector and motor vehicle repair reporting the largest increases.
The employment figures suggest the robust recovery will absorb many of the 1 million workers who remained on furlough until the government ended the programme last month.
Meanwhile, underlying wage growth rose to between 4.1 per cent and 5.6 per cent in the three months through August, well above the 3 per cent seen before the pandemic.
That indicates price pressures in the economy that have started to concern the Bank of England, with policymakers saying inflation will top 4 per cent later this year, double central bank’s target, and will probably prompt a tightening in monetary policy with an interest rate rise.
“The further strengthening of the labour market in August may prompt some members of the Monetary Policy Committee (MPC) to put more weight on the upside risks to inflation rather than the downside risks to economic growth,” said Paul Dales, senior UK economist at Capital Economics.
“As such, these data increase the chances of a rate hike in the coming months.”
Hussain Mehdi, macro and investment strategist at HSBC Asset Management, said inflation concerns and a decent October jobs report “could open the door to a hike as soon as the December meeting”.
Prime Minister Boris Johnson on the other hand paints the jump in vacancies as a positive story for Britain, casting it as part of the economy’s transition away from the European Union.