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Monday, November 29, 2021

Two million workers find new jobs as ‘Great Resignation’ gathers pace

Unemployment fell to 4.3pc in the quarter, down from 4.5pc in the three months to August and from a peak of 5.2pc at the end of last year.

Annual pay growth slowed to 5.8pc for the three months to quarter and 4.4pc for September alone, the slowest pace since the spring, in part because of Covid distortions and the effect of furlough which weighed down earnings in 2020.

Key for the Bank of England and next month’s interest rate decision is what happened to the jobs market once furlough closed at the end of September.

Andrew Bailey, the Bank’s Governor, said he is keeping a close eye on the payroll employment data, which monitors employees whose tax goes through the pay as you earn system.

This showed a 160,000 rise in employees in October, suggesting the economy’s recovery has not been derailed by the closure of the coronavirus job retention scheme.

A total of 29.3m people were employed on a pay as you earn tax basis in October, 235,000 more than in February 2020, before Covid.

Paul Dales at Capital Economics said this suggested that only a small share of the 1.1m people still on furlough when the scheme ended lost their jobs. 

“It doesn’t look as though the labour market loosened much after the end of the furlough scheme. If the next labour market release on 14 December tells a similar story, we think that will be enough to prompt the Bank to raise interest rates from 0.1pc to 0.25pc at the meeting on 16 December,” he said.

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