The UK jobs market tightened in October, bringing 160,000 more people into employment and absorbing workers who were on the government’s furlough programme during the pandemic.
The figures along with a surge in vacancies indicate strength in the labour market that may open the door for the Bank of England to raise interest rates next month. It suggests very few of the 1.1 million workers who were on furlough became unemployed when the programme finished in September.
BOE Governor Andrew Bailey has said evidence of how the UK labour market reacted to the end of the furlough plan was the missing piece of the jigsaw when policy makers opted to leave rates unchanged in November. The next jobs report, which will contain official data on the employment and unemployment rates for October, will be released two days before the central bank's decision in December.
Surveys suggest the vast majority of those furloughed at the end of September returned to work. A Resolution Foundation survey published at the weekend found that only 12 per cent – around 136,000 people – were no longer employed in October – and most of those were inactive rather than unemployed. That chimes with an ONS survey that found only 3 per cent were made redundant.
“Responses to our business survey suggest that the numbers made redundant was likely to be a small share of those still on furlough at the end of September 2021,” the ONS said in a statement on Tuesday.– Bloomberg
