Wages grew at the fastest rate since 2007
The number of employed people in Britain jumped by a record number during May as coronavirus restrictions were eased further, and pubs and restaurants began serving people indoors again.
However, the employment figure remains over 500,000 below the pre-pandemic high.
The headline unemployment rate fell for a fourth consecutive month to 4.7% for the quarter ending in April.
Tax data made available on Tuesday shows UK companies increased their employment numbers by 197,000 in May, the large increase in a single month since records began as far back as July 2014. The total number of employed people now stands at 28.5m.
In addition, wages also grew at the fastest rate since 2007 for the year ending in April, while the figures are somewhat skewed by comparisons with depressed wages a year ago, in. addition to a high number of job losses among low-paid employees.
“The latest forecasts for unemployment are around half of what was previously feared and the number of employees on payroll is at its highest level since April last year,” finance minister Rishi Sunak said.
Laith Khalaf, financial analyst at AJ Bell, commented:
“All the dials in the labour market are pointing in the right direction, but they’re heavily distorted by the gravitational pull of the furlough scheme, lockdown lifting bottlenecks, and the effect of annual comparisons now lapping the first wave of the crisis. We won’t get a clear picture of the health of the post pandemic economy until the back end of this year, and that means the Bank of England isn’t going to rush to any interest rate hikes in the next few months, even if the UK looks to be firing on all cylinders.”
“Hospitality businesses are getting friction burns, as the entire sector opens up and looks for staff to service a horde of customers, hungry to make the most of their new freedoms. However, after an initial round of playing catch up, there’s only a certain amount of food and booze customers will want to consume and so the growth from reopening can’t be extrapolated infinitely. That applies across a whole host of sectors and indeed the UK economy at large.”