The Guardian

Record 1m job vacancies as UK payroll levels rebound

- Richard Partington Economics correspond­ent

Employers scrambling to hire staff amid widespread labour shortages after lockdown helped to return the number of workers on company payrolls to pre-pandemic levels in August, official figures show.

The Office for National Statistics (ONS) said the number of payroll employees increased by 241,000 to 29.1 million in August, lifting employment in all regions to pre-Covid levels except in London, Scotland and south-east England.

It came as the number of job vacancies soared to more than 1m in August for the first time since official records began in 2001, rising by 35% in the space of three months across all sectors of the economy.

Reflecting difficulty hiring staff for a wide range of businesses, the ONS said the largest increase was in accommodat­ion and food services – the sector that includes hotels, pubs and restaurant­s – with a 75% increase over the past three months.

Despite the rise in payrolled employees in August, which is collected from HM Revenue and Customs data, the ONS said employment remained below pre-Covid levels

in data gathered in its labour force survey in the three months to July. Unemployme­nt was estimated at 4.6%, a drop of 0.3 percentage points on the previous quarter but still 0.6 percentage points higher than before the pandemic struck.

Employment, which measures the proportion of people aged 16 to 64 in work, rose steadily to 75.2% in the three months to the end of July but remains 1.3 percentage points lower than pre-Covid levels.

The official headline rates differ from the HMRC payroll numbers because they are based on surveys rather than company filings and cover a three-month period. The HMRC figures also exclude self-employment and may double count some workers who have more than one job.

About 1.6m jobs were still furloughed at the end of July, according to the latest data published by HMRC last week, with the highest numbers in sectors of the economy where pandemic restrictio­ns are toughest. More than half of the total workforce in air passenger transport remains on furlough, while there are also large numbers in the arts and leisure industries.

Nye Cominetti, the senior economist at the Resolution Foundation think tank, said self-employment remains 700,000 down on pre-Covid levels, adding that as many as 1 million employees could still be on furlough when the scheme closes at the end of the month.

“There is still ground to make up in the labour market. With the furlough scheme ending in little over two weeks’ time, we should expect a fresh rise in unemployme­nt this autumn, particular­ly among furloughed staff that aren’t able to return to their previous jobs,” he said.

Some economists said the economy appeared to be well prepared for the end of furlough, suggesting that record job vacancies could help to prevent a sharp rise in unemployme­nt.

Rishi Sunak, the chancellor, said the latest figures showed the government’s plan for jobs was working, with unemployme­nt falling for seven months in a row.

“As we continue to recover from the pandemic our focus remains on creating opportunit­ies and supporting people’s jobs,” he added.

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