UK wage growth hits a record as job vacancies pass one million

UK companies posted more than one million new job vacancies for the first time as loosening coronavirus rules led to an unprecedented scramble for staff.

The Office for National Statistics (ONS) figures also show evidence of inflation pressures from rising wages, with average earnings in the three months through June surging a record 8.8 per cent from a year earlier. While the figure partly reflects distortions created by the pandemic, underlying wage pressures also are gathering pace.

The pickup underscores the scale of the recovery from the deepest economic slump in 300 years. Although the Bank of England expects strains in the labour market to prove temporary, policymakers warned this month that meeting the 2 per cent inflation target will require a modest withdrawal of monetary stimulus.

"Our plan for jobs is working, saving people's jobs and getting people back into work," Chancellor of the Exchequer Rishi Sunak said in a statement on Tuesday. "There could still be bumps in the road, but the data is promising."

The headline rate of unemployment fell to 4.7 per cent in the second quarter, the lowest since the summer of 2020 after the first pandemic lockdown. That figure is set to rise when wage subsidies for furloughed workers end on Sept 30.

Real-time tax data showed the number of employees payrolls rose by 182,000 in July, meaning that about 80 per cent of the payrolls lost during the pandemic have now been recovered.

The number of job vacancies surged by 953,000 in from May to July, well above the level in February 2020. That's much quicker than the 290,000 growth in the previous quarter.

Arts, entertainment and recreation saw the strongest quarterly growth. BLOOMBERG