Economics: Mixed signals in the UK labour market

Date : 25 March 2021

ONS data on the UK labour market offers a combination of positive and negative signals, suggesting that the worst effects of the Coronavirus emergency on workers may be easing, but that full recovery has not yet arrived

  • Good news:
    • Number of employees rose slightly in January and February 2021
    • Redundancy rates are slowing, though they remain elevated compared with the pre-Covid level
    • Unfilled vacancies are increasing
  • Bad news:
    • Labour demand in foodservice, recreation and other functions hit by Coronavirus remains low
    • Rising vacancies are in public admin, so they may not offer evidence of commercial strengthening
    • Most job vacancies are in large organisations, not small ones

Perhaps most worrying is the finding that around 10% of jobs in foodservice and recreation have been lost since the start of the Coronavirus emerging, in spite of government measures to support employment.

ONS data is supported by findings from the CIPD’s Labour Market Outlook report. This reports strengthening recruitment intentions and weakening redundancy expectation on the part of employers.

This good news is offset by relatively low expectations of future pay rises – low rises in the private sector and no rise at all in the public sector.

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