- UK job vacancies jumped above 1 million for the first time on record in July, official figures showed Tuesday.
- Wage growth also hit a record, in a sign that some inflationary pressures are building.
- The UK economy is bouncing back strongly but some sectors are struggling to find staff.
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The number of UK job vacancies shot above above 1 million for the first time on record in July, the country’s Office for National Statistics said Tuesday, in one of the clearest signs yet of intensifying labor shortages in some sectors.
UK wages also rose strongly as the economy bounced back, with growth in average total pay jumping by a record 8.8% in the three months to June from a year earlier. However, the ONS said the statistics were partly skewed by the pandemic and that underlying wage pressures were more moderate.
The unemployment rate fell to 4.7% in the quarter to June from 4.8% in the three months to May. It stood just 0.8 percentage points above the pre-pandemic level seen in the three months to February 2020, thanks in large part to the government’s wage subsidy scheme that has supported companies and workers.
“The robust jobs recovery suggested by business surveys is confirmed by today’s figures, and that is great news,” said Neil Carberry, chief executive of the UK’s Recruitment & Employment Confederation.
“But record vacancy numbers once again emphasise the risk posed by labor shortages in many key sectors. The number of vacancies is now at an all-time high and is still rising, with employers desperate to hire new staff as the economy recovers.”
The ONS said there were an estimated 953,000 job vacancies in the May-to-July period, a record high, a surge of 44% compared with the previous quarter. It added that early July survey data showed the number had climbed above 1 million.
Businesses in the arts, entertainment and recreation sector, such as cinemas, galleries and gyms, saw the fastest growth in vacancies in the three months to July. The UK government loosened coronavirus restrictions in the spring, kickstarting a scrabble to find workers. Accommodation and food services companies logged the second-strongest growth.
The UK’s wage-subsidy scheme is closing at the end of September. Samuel Tombs, chief UK economist at consultancy Pantheon Macroeconomics, said he thinks the UK unemployment rate will rise to 5.2% in the final three months of the year.
Ruth Gregory, senior UK economist at Capital Economics, said she thinks the Bank of England won’t start raising interest rates until mid-2023, despite the strong economy.
Yet she said Tuesday’s figures “suggest that the risks are tilted towards wage growth coming in a bit higher and the [BOE] raising rates a bit sooner than we anticipate.”