UK labour market remains historically tight
18 January 2023In new UK labour market data released by ONS, the UK labour market remains historically tight.
In new UK labour market data released by ONS, the UK labour market remains historically tight, however, there are indications that the poor economic environment is now having an impact.
In September to November 2022, unemployment remained low at 3.7%, but was up 0.2% on the previous three-month period.
The UK employment rate was unchanged, but average weekly hours worked between September and November fell when compared with the previous 3-month period, suggesting reduced economic output.
Businesses are beginning to take action to cut staff as a response to the challenging economic environment with the redundancy rate rising to 3.4 per 1,000 employees in September to November.
Whilst this figure has been rising, it is well below the peak 12.2 following the 2008 recession.
Job vacancies continue to fall, but very slowly. There are only 75,000 fewer vacancies than the previous month. Vacancies remain high compared to their pre-pandemic levels.
High levels of vacancies coupled with a relatively low redundancy rate suggest that the key concern for business is still attracting labour rather than cutting excess labour.
The number of economically inactive people in the UK rose slightly, by 10,000 people, and remains a key policy challenge for the government and businesses. This group has expanded rapidly during the COVID pandemic due to long term sickness and retirement.
Over previous months there has been a slow decline in the number of those economically inactive, however, this reversal suggests that economically inactive people are not currently being tempted back into the labour market.
(Economic inactivity refers to people of working age who do not have a job and are not actively searching for one)
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