The number of UK payroll employees increased by 207,000 MoM in September, reaching a record 29.2 million and returning to pre-COVID levels seen in February 2020.

Following a period of employment growth and low unemployment, the employment rate generally declined and the unemployment rate increased since the start of the pandemic. However, both have shown indications of improvement since the end of 2020. Labour Force predictions for June to August show the employment rate increased by 0.5 pp, reaching 75.3%, whereas the unemployment rate fell by 0.4 pp to 4.5%. The rate of economic inactivity decreased by 0.2 pp from the previous quarter to 21.1%.

In Q3, the number of job vacancies reached a record high of 1,102,000, up 318,000 from the pre-pandemic period (January to March 2020) and marking the 2nd consecutive month that the 3-month average has risen over 1,000,000. All industry sectors were above or equivalent to their pre-pandemic levels (January to March 2020) in Q3. Accommodation and food service activities increased the highest, by approximately 50,000 (59%). In September, the experimental single-month vacancy reached a record high of nearly 1.2 million.

For the 3 months June to August, average total pay growth (including bonuses) increased by 7.2%, while regular pay (excluding bonuses) increased by 6.0%. However, annual growth in average employee pay were impacted by temporary factors which inflated the increase in the headline growth rate. These include base effects where the most recent months are now compared to low base periods when earnings were first affected by the pandemic, and compositional effects where there has been a decrease in the number and proportion of lower-paid employee jobs, increasing average earnings.