PwC comments on ONS labour market figures

Rob Clarry, economist at PwC UK, says,

"The UK labour market has passed its sternest test since the start of the pandemic, posting a strong jobs report despite the end of the furlough scheme. The unemployment rate fell by 0.5 percentage points to 4.3%, driven by a record high net flow of 304,000 from unemployment to employment. Meanwhile the number of vacancies available reached another record high--with demand three times higher than the pre-pandemic level. All of this points towards increasing tightness in the labour market.

"However, despite these records, there remains some slack in the labour market, with the number of hours worked remaining below the pre-pandemic level. This suggests that some people are reluctant to return to work, potentially due to fears about COVID-19, or they do not have the skills to take roles where demand is hot. We expect to see a period of adjustment over the coming months as people retrain and move into new sectors.  

"Overall, we believe that today’s labour market figures will increase the pressure on the Bank of England to raise interest rates at their December meeting."