Labour market activity improves as UK unemployment rate cools to 4.3%

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Labour market activity improves as UK unemployment rate cools to 4.3%

 Labour market activity improves as UK unemployment rate cools to 4.3%
Image source: ismagination,


  • Rate of unemployment in the UK eased to 4.3% in three months to September
  • In the corresponding period, the employment rate improved to 75.4%
  • With 1,172,000 vacancies, the reading hit a fresh record high in August-October period

The employment activity in the United Kingdom has been continuously improving as the businesses reopen at a much larger scale for the first time in the pandemic era following the series of easements done by the government, terminating the social distancing guidance that restricted most of the commercial settings to operate with curtailed staff.

The persistent shortage of skilled workforce across the industry has partly affected the employment landscape as enterprises continue to grapple with the extended miseries of Covid-19. The resurgence of cases in the present calendar year has materially delayed the recovery for a large section of enterprises.

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Irrespective of the market-wide challenges, the rate of unemployment has continued to dip since May of 2021. According to the data unveiled by the Office for National Statistics (ONS), the rate of unemployment in the UK eased to 4.3% in the three months to September 2021 as the July-September stretch allowed a window of reopening for many businesses, as a results of which a quarterly increase in the employment rate has been witnessed.

The removal of restrictions, moderation of border control measures, relaxation in the domestic travel, the total hours worked has also increased during the corresponding period as compared to the preceding three-month period.

Though the rate of economic activity has remained largely similar due to the continuous weakness on the back of faltering supply chain systems, input price inflation, inadequacy of raw materials and the elongated dejection due to the evolving course of Covid-19 (SARS-CoV-2) virus, fear of mutated strains, variants of concerns, WHO-designated variants under investigation and the emerging sub-lineages of virus.

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As per the early estimates, the employment rate in the UK stood at 75.4% in the three months to September of 2021, witnessing a marginal improvement of 0.4% from the rate of employment in the April-June quarter of the current year. The present rate is 1.1% lower as compared to the pre-pandemic period, the last three month period of December 2019 to February 2020 that can be effectively termed as the last quarter that concluded without the aftereffects of national lockdowns and pandemic-related restrictions.

On the other hand, the rate of unemployment in the UK is just 0.3% higher as compared to the pre-Covid quarter. Narrowing rate of unemployment certainly indicates the level of improvement in the jobs market with businesses able to retain their employees with the presence of the furlough scheme.

The rate of unemployment in the upcoming months will indicate the potential of recovery if the businesses remain in a position to retain, hire and deploy human capital without monetary assistance as all the benefits under the furlough scheme have ended in September. Keeping up the pace of recovery, the rate of unemployment has declined by 0.5% from the previous three-month period.

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According to the ONS estimates, the number of payrolled employees grew by 160,000 to 29.3 million in October of 2021. Supplementing the recovery in the employment landscape, the number of Britons claiming unemployment benefits dropped to 14,900 in October, registering a decline for the eighth straight month as personal earnings continue to improve following the reopening-led recovery.

The total number of vacant positions across the businesses registered a fresh record high in the August-October period of 2021 as the number escalated to 1,172,000. This is well supported as 15 of 18 industry sectors have reported a record high number of vacant positions. The net vacancies are 388,000 higher as compared to the January-March quarter of 2020.


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