Unemployment drops by 182,000 with 'no sign' of mass job cuts as furlough ends

17 August 2021, 07:29 | Updated: 17 August 2021, 09:27

The number of UK workers on payrolls rose by 182,000 between June and July
The number of UK workers on payrolls rose by 182,000 between June and July. Picture: Alamy

By Daisy Stephens

UK worker numbers have rebounded further in July as the labour market recovery continued despite the initial winding down of the furlough scheme, according to official figures.

The Office for National Statistics (ONS) revealed that the number of UK workers on payrolls rose by 182,000 between June and July, although at 28.9 million it is still 201,000 lower than before the pandemic struck.

"The world of work continues to rebound robustly from the effects of the pandemic," said Jonathan Athow, deputy national statistician for economic statistics at the ONS.

"The number of people on payroll was up again strongly and has now grown over half a million in the past three months, regaining about four-fifths of the fall seen at the start of the pandemic.

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"Meanwhile early survey figures show that the number of job vacancies passed one million for the first time ever in July.

"There was no sign of redundancies starting to pick up in our survey data ahead of the furlough scheme beginning to wind down, and Insolvency Service figures for July suggest the same."

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The ONS also confirmed that the rate of unemployment had dipped to 4.7 per cent for the three-month period to the end of June.

Analysts had predicted that the unemployment rate would stay flat at 4.8 per cent for the quarter.

The ONS also reported a further surge in job vacancies as firms seek to fill roles following the reopening of the economy, rising by more than 290,000 against the previous quarter.

It added that, at 953,000, the number of vacancies was the highest estimated figure since records were started in 2001.

Arts, leisure and food service firms particularly contributed to the surge in job openings, it added.

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The data also showed total wage growth including bonuses lifted higher to 8.8%, or 7.4% without bonuses, for the three months to June.

In response to the figures, Chancellor Rishi Sunak said: "Today's figures show that our plan for jobs is working - saving people's jobs and getting people back into work.

"I know there could still be bumps in the road but the data is promising - there are now more employees on payrolls than at any point since March 2020 and the number of people on furlough is the lowest since the scheme launched."

Minister for Employment Mims Davies MP said there were "positive signs" but there was "still work to do".

"There are positive signs of recovery in today’s jobs figures with the number of young people and older workers on payrolls up on the quarter and the employment rate increasing to 75.1 per cent," said Ms Davies.

"There is still work to do and we’re focused on helping employers fill roles through our Plan for Jobs – giving people of all ages the skills, support and experience needed to confidently land that next opportunity."

Yael Selfin, chief economist at KPMG UK, said: "The labour market outperformed expectations as the economy accelerated with the relaxation of Covid-related restrictions.

"Changes to the business environment, such as the fall in business travel and the rise in online commerce, increased the need for skills, from IT specialists to hauliers, while at the same time caused an unusually high level of mismatch in the UK's labour market."