UK Job Vacancies Hit Record High Just as Furlough About to Come to an End

The British economy - like that of much of the rest of the world - came to a shuddering halt when the COVID-19 pandemic struck in March 2020. The UK government paid out billions so that millions of workers could be furloughed, rather than made redundant.

Job vacancies in the UK have hit a record high with 29.1 million people in work and employers struggling to find workers to fill jobs.

Figures from the Office of National Statistics show that August’s payrolls rose by 241,000, rising above the level it was when the pandemic hit last year.

The unemployment rate fell to 4.6 percent in the three months to July, said the ONS.

It comes with the government’s furlough programme due to come to an end on 30 September.

Last month 700,000 workers were on furlough, down from a high of millions last summer.

The Chancellor of the Exchequer, Rishi Sunak, said on Tuesday, 14 September: "Today's statistics show that our plan for jobs is working.”

Work and Pensions Secretary Therese Coffey said: “Having done the jabs, we want to continue to try to get people into jobs.”

But the rise in job vacancies also highlights the difficulty many companies are finding in hiring qualified people for crucial roles, which in some cases has been exacerbated by Brexit which has reduced the number of EU nationals available.

Grant Shapps unveils his solution for the shortage of lorry drivers: pic.twitter.com/66yMgJn2iv

— Larry the Cat (@Number10cat) September 7, 2021

It has led to a shortage of fruit pickers and also, crucially, a lack of lorry drivers which has led to huge problems with deliveries to supermarkets and fast food restaurants, causing chains like KFC, Nando’s and Waitrose to run out of certain items.

With furlough coming to an end, a number of businesses are expected to make employees redundant but even if they want to, a lack of skills and training, will not allow those people to immediately take up jobs as lorry drivers or other skilled or semi-skilled workers.

British government bond yields rose and the Bank of England might raise interest rates if wage pressure continues to rise.

Ruth Gregory, an economist at Capital Economics told Reuters: "The latest data brought more signs that labour market slack is declining fast and that labour shortages are contributing to faster underlying pay growth. The danger is that they persist for longer than we expect, causing inflation to stay high and the Bank of England to pull the interest rate trigger next year."