United Kingdom: Labor market stays healthy despite end of furlough
According to the ONS, in July–September the unemployment rate registered 4.3%, down 0.2 percentage points from the previous rolling quarter. Experimental data for October showed that employment rose by 160,000 from September, while job vacancies were at a record high in the month.
While still early days, the data thus suggests a negligible impact from the end of the government’s wage subsidy scheme (furlough) in September, boding well for private spending in the final quarter. Moreover, labor market indicators are currently being tracked carefully by the Bank of England: The latest strong set of figures could give the Bank the assurances needed to hike rates in the near term.
On this point, George Buckley, economist at Nomura, commented:
“There’s another set of official jobs and wage data to be published two days ahead of the MPC’s 16 December meeting, so today’s figures are not the final say on the labour market ahead of that event. But another similar report next month—perhaps with slightly stronger pay rates—should, we think, be enough for the Bank to justify a first, modest (15bp) step on the road to tightening.”