UK jobs recovery gathers pace as restrictions are eased across the country

The UK's jobs recovery has continued apace as lockdown restrictions were eased and the rapid rollout of coronavirus vaccines shored up confidence in the wider economy, official figures showed Thursday.

However, economists cautioned against complacency amid concerns over the sharp pick-up in infections and the upcoming end of a salary support scheme. The Office for National Statistics said the country saw the number of workers on payroll jump by 356,000 in June. That's the biggest monthly increase since equivalent records began in 2014.

The statistics agency said the gradual easing of lockdown restrictions during the spring, particularly the reopening of the hospitality sector drove the recovery. “This was especially marked for younger people, who had been hardest hit by earlier lockdowns,” said Darren Morgan, the agency's director of economic statistics. Firms are expected to be further on the hunt for workers ahead of the final lifting of restrictions in England on July 19, when all legal limits on social contact are to be ditched. The other nations of the UK have also been lifting restrictions but a little bit slower than in England.

Despite seven months of increases, the number of payrolled workers has still fallen by 206,000 since the pandemic struck in March last year. Overall, the statistics agency said the jobless rate was unchanged at 4.8% in May, the unemployment figures are conducted separately to the more timely payroll data.

At the outset of the pandemic, there were fears that unemployment would rise sharply to over 10% but a British government salary support scheme helped limit the number of people losing their job during the pandemic. “We are bouncing back," said treasury chief Rishi Sunak. “The number of employees on payrolls is at its highest level since last April and the number of people on furlough halved in the three months to May.”

That Job Retention Scheme, which at its most generous saw the government paying 80% of the salaries of those unable to work because of the restrictions, is being phased out and is due to end at the end of September. There are concerns that unemployment will spike then, especially if the current resurgence of the virus as a result of the spread of the delta variant forces the government to reimpose restrictions.  “These encouraging signs must not breed complacency among policy makers,” said Nye Cominetti, senior economist at the Resolution Foundation think tank. "The UK's jobs recovery is far from complete, and big challenges lie ahead as the spread of the virus continues, and the furlough scheme ends, just as unemployment support is set to be cut."