London: Employers in the United Kingdom hired a record number of people in November, indicating that the labour market has weathered the end of the government’s furlough plan and emphasising the Bank of England’s plight as it meets this week to discuss interest rates.
According to data from the UK’s tax office, 257,000 individuals were added to firm payrolls in the latest month, the highest number since records began in 2014.
Under pressure to handle rapidly rising inflation, the Bank of England has stated that it must be certain that the conclusion of the furlough plan at the end of September did not result in an increase in unemployment before raising rates for the first time since the epidemic.
However, the discovery of the Omicron coronavirus at the end of November has caused investors to lower their expectations for a rate hike by the Bank of England as soon as Thursday, following its December policy meetings.
“The tight labour market and low unemployment shown in today’s statistics could be enough to justify a rate hike under the Bank of England’s November guidance,” said Yael Selfin, Chief Economist at KPMG UK.
“However, given the recent development of the Omicron version, we now expect the MPC to unanimously delay increasing rates until next year.”
The figures from the UK’s tax office showed that the increase in October was reduced to 74,000 from an earlier estimate of 160,000.
“With no evidence of the furlough programme coming to an end, the overall number of employees on payroll continued to expand rapidly in November,” said Darren Morgan, ONS director of economic statistics.
He warned that the data could include workers who had recently been laid off but were still working out their notice periods.
According to the ONS, part-time workers accounted for the majority of recent job growth.
The unemployment rate fell to 4.2 percent in the three months to October, as forecast by economists surveyed by Reuters, and was down from 4.3 percent in the previous three months.
In the August-October period, employment increased by 149,000, somewhat less than the 228,000 projected in a Reuters survey, while the number of unemployed declined by 127,000.
The ONS reported that average weekly wages were 4.9 percent higher in the first three months of 2020 than in the same period the previous year, the weakest yearly growth since March.
Earnings were 4.3 percent higher than a year ago, excluding bonuses, the weakest increase since the three months to February.
The ONS announced that it would no longer estimate underlying pay growth without taking into account the impact of the furlough programme and other pandemic-related factors that have skewed the figures.
In the three months leading up to November, the number of job vacancies reached an all-time high of 1.219 million, albeit the rate of growth in new positions slowed.
