The UK unemployment rate dropped from 4.5 per cent to 4.1 per cent between September and November 2021, according to the Office for National Statistics (ONS), with the labour market continuing to show strong signs of recovery last winter.
Overall, unemployment dropped by 184,000 as the number of people on the country’s payroll increased to 30m.
The current rate of unemployment is now only 0.1 percentage points higher than before the pandemic.
During the three month window, estimates showed both an increase in the employment rate and a decrease in the unemployment rate compared with June to August 2021.
The UK employment rate was estimated at 75.5 per cent, 1.1 percentage points lower than before the coronavirus pandemic, but 0.2 percentage points higher than the last set of recorded results.
Meanwhile, the country’s economic inactivity rate was estimated at 21.3 per cent, 1.0 percentage point higher than before the pandemic, and 0.2 percentage points higher than the previous three-month period.
Darren Morgan, director of economic statistics at the ONS said: “The number of employees on payrolls continued to grow strongly in December, with the total now well above pre-pandemic levels. New survey figures show that in the three months to November, the unemployment rate fell back almost to where it was before Covid-19 hit, and those reporting they’d recently been made redundant fell to their lowest since records began more than a quarter of a century ago. However, while job vacancies reached a new high in the last quarter of 2021, they are now growing more slowly than they were last summer. Following recent rises in inflation, in November real wages fell on the year for the first time since July 2020.”
However, it is worth noting the period does not cover the emergence of the Omicron variant or the government’s decision to bring in Plan B measures, including work-from-home advice.
Shane O’Neill, head of interest rate trading for Validus Risk Management, said: “The unemployment rate fell from 4.3 per cent in October to 4.1 per cent in November, better than market expectations of 4.2 per cent. However, this number, though positive, will be taken with a pinch of salt mas it predates both the BoE rate hike and the onset of Omicron, which caused significant economic scarring.”