The number of people employed in the UK rose in the month after the government’s licensing regime closed, according to official data that will bolster the case for the Bank of England raising interest rates to curb inflation.
The figures, released Tuesday by the National Statistics Office, are the first strong evidence that the labor market resisted the expiration of the wage subsidy scheme, which still held more than a million jobs in its final weeks.
The number of employees on the payroll increased by 160,000 to 29.3 million between September and October, a sharp increase despite the fact that the September total was revised slightly downward.
Surveys already suggest that the majority of the unlicensed workers returned to work in October, with only a small portion losing their job or choosing to leave the workforce. The Governor of the Bank of England, Andrew Bailey, told MPs on Monday that unemployment now looked “lower than our forecast would imply.”
The state of the labor market will be one of the biggest factors guiding policymakers’ decision on interest rates when they meet in December, and markets are already betting they will pull the trigger on the first hike since 2018.
Figures from the ONS also showed that the employment rate averaged 75.4 percent in the three months through September, an increase of 0.4 percentage points from the previous quarter, while unemployment fell 0.5 percentage points. to 4.3 percent, a larger drop than analysts expected.
There was also evidence that the UK is participating in the wave of resignations that has swept the US, as workers take advantage of a booming job market: ONS said job-to-job changes were in a record level, and that this was driven by resignations. , not for layoffs. The number of vacancies also reached a new record in the three months through October.
Chancellor Rishi Sunak said the figures were “testimony to the extraordinary success of the licensing plan.”
However, business groups said labor shortage they were now jeopardizing the economic recovery, and the British Chambers of Commerce said chronic staff shortages were “intensifying” and could force companies into “a more lasting decline in their operating capacity.”