Fewer unemployed as vacancies hit record

The UK unemployment rate fell last month to its lowest level since 1974 while job vacancies hit a new record high, official figures showed on Tuesday.

Office workers talking and looking happy
Data from the Office for National Statistics (ONS) put the jobless rate in March at 3.8%, down from 3.9% the previous month.Meanwhile, the number of vacancies over the first quarter of the year reached a record high of 1.29 million, representing a rise of almost a half-million compared to the total before the pandemic struck two years ago.

Strong UK jobs market

Chancellor of the Exchequer Rishi Sunak said, "Today's stats show the continued strength of our jobs market, with the number of employees on payrolls rising once again in March and unemployment falling further below pre-pandemic levels."However, he accepted that soaring inflation was affecting many people's pay packets, adding that the government was "helping to cushion the impacts of global price rises through over £22 billion of support for the cost of living this financial year".Ruth Gregory, senior UK economist at Capital Economics, attributed much of the fall in the jobless rate to people taking themselves out of the workforce by retiring or suffering long-term sickness, resulting in the number classed as inactive rising by 76,000 over the quarter.

UK firms report fastest growth since pre-pandemic

The ONS figures came on the heels of a survey this week from business advisory firm BDO showing that firms were reporting the fastest growth in the UK labour market since before the pandemic."Strong hiring intentions across both manufacturing and services sector businesses outweighed the ongoing concerns around the cost of living, rising energy prices and supply chain disruption caused by the Russian war in Ukraine," reported BDO."However, this positivity could be short lived, with inflation predicted to soar throughout the year and external pressures expected to grow."

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Cost of living increases and rising inflation create concerns

The BDO Employment Index, which measures business sentiment among senior managers, reached 112.74 in March, representing a month-on-month gain of almost two points and well above the 95 level indicating growth.Kaley Crossthwaite, a partner at BDO, said, “The labour market has shown resilience throughout the pandemic and then continued growth as restrictions have gradually lifted.“While it’s reassuring to see employment return to near pre-pandemic levels, this strong form could come to an end as the cost-of-living crisis, rising inflation and wider geopolitical matters distract businesses from growth and place pressure on the employment index.”Another report this week found there were 15 million people with degrees or equivalent qualifications working in the UK at the end of 2020 – and nearly 16 million positions in managerial and professional occupations defined as graduate-level jobs.

Universities UK: government must invest in a sustainable long-term funding solution for higher education

Based on official data, the report from Universities UK "shows that employer demand for UK graduates is significant...it has increased year-on-year and is likely to grow in the future", according to Prof Steve West, the organisation’s president.He added, “It is important that the UK government develops the right conditions for universities to fully support business growth and skills development for learners of all ages. To be clear, this means that the UK government must invest in a sustainable long-term funding solution for higher education.”

Read more news and views from David Sapsted in the Spring 2022 issue of Think Global People.

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