Employers scrambling to hire staff amid widespread labour shortages after lockdown helped to return the number of workers on company payrolls to pre-pandemic levels in August, official figures show.
The Office for National Statistics said the number of payroll employees increased by 241,000 to 29.1m in August, lifting employment in all regions of the UK to pre-Covid levels except in London, Scotland and south-east England.
It came as the number of job vacancies soared to more than 1m in August for the first time since official records began, rising by 35% in the space of three months across all sectors of the British economy.
Reflecting difficulty hiring staff after lockdown for a wide range of businesses across Britain, the ONS said the largest increase was in accommodation and food services – the sector which includes hotels, pubs and restaurants – with a 75% increase over the past three months.
Despite the rise in the number of payrolled employees in August, which is collected from HMRC data, the ONS said employment in the UK still remained below pre-Covid levels in official data gathered in its labour force survey in the three months to July.
Unemployment was estimated at 4.6%, a drop of 0.3 percentage points on the previous quarter but still 0.6 percentage points higher than before the pandemic struck.
Employment, which measures the proportion of people aged 16 to 64 in work, rose steadily to 75.2% in the three months to the end of July, but remains 1.3 percentage points lower than pre-Covid levels.
Yael Selfin, the chief economist at KPMG UK, said the jobs market was showing signs of recovery but there was “more pain to come” once the furlough scheme closes at the end of the month, and as firms struggle to hire staff.
“While the pressure should ease as more people look to return to work and the furlough scheme ends, the UK labour market is set to remain choppy with vacancies taking time to fill due to skills shortages and reduced availability of overseas workers,” she said.
Rishi Sunak, the chancellor, said the latest figures showed the government’s plan for jobs was working, with unemployment falling for seven months in a row. “As we continue to recover from the pandemic, our focus remains on creating opportunities and supporting people’s jobs,” he added.