UK payrolls rise, unemployment rate falls

by | Nov 16, 2021

Share this article

The UK unemployment rate fell again in September, while the number of workers on payrolls rose despite the end of the furlough scheme, potentially reinforcing expectations of a rate hike by the Bank of England.
According to figures released on Tuesday by the Office for National Statistics, the number of workers on payrolls rose 0.6%, or by 160,000 between September and October to 29.3m.

Sam Beckett, ONS head of economic statistics, said: “It might take a few months to see the full impact of furlough coming to an end, as people who lost their jobs at the end of September could still be receiving redundancy pay.

“However, October’s early estimate shows the number of people on the payroll rose strongly on the month and stands well above its pre-pandemic level.”

Meanwhile, the unemployment rate fell to 4.3% in the three months to September from 4.5% in August, coming in slightly below consensus expectations of 4.4%.

Samuel Tombs, chief UK economist at Pantheon Macroeconomics, said that while the further strong rise in payroll employee numbers in October confirms that unemployment did not jump as soon as the furlough scheme ended, an interest rate rise at the MPC’s next meeting in December still is not a done deal.

“While most of the 1.1m people – nearly 4% of all employees – who still were furloughed for at least some hours at the end of September appear to have returned to their former employers, we do not know if they went back full-time or part-time.

“Business surveys and near-real-time indicators suggest that GDP was only marginally higher in October than in September, so most furloughed staff will have remained surplus to requirements. Many formerly furloughed staff, therefore, likely now are working fewer hours than they would like and will have endured a drop in their income.

“These employees likely will now actively look for work, easing recruitment difficulties and the associated upward pressure on wages. We will only be able to judge how large the rise in involuntary part-time working has been when October’s LFS data are published on December 14 – just before the MPC’s December 16 meeting – as part-timers are asked whether they would like a full-time position.”

Share this article

Related articles

UK inflation hits 40-year high of 10.1%

UK inflation hits 40-year high of 10.1%

Higher food prices helped push up inflation in September, official data showed on Wednesday, to a record 10.1%. According to the Office for National Statistics, the consumer price index rose by 10.1% in the 12 months to September, compared to August's rate of 9.9%....

Reports of delay to bond sale ‘inaccurate’ – BoE

Reports of delay to bond sale ‘inaccurate’ – BoE

The Bank of England appeared to deny reports on Tuesday that it wanted to delay selling billions of pounds of government bonds. The central bank acquired £838bn of gilts during its quantitative easing programme. It had intended to start selling them on 6 October, but...

Trending articles