LONDON (Reuters) - The number of employees on British company payrolls surged by the most since the start of the coronavirus pandemic, according to data which painted a picture of a roaring jobs market and also showed growing inflation pressure from rising wages.
A day after a top Bank of England official said the time for the central bank to think about taking action to head off inflation was approaching sooner than he had thought, tax data showed a 356,000 leap in employment in June from May.
The increase was driven by a 94,000 leap in accommodation and food jobs, which were heavily hit by lockdowns that have now largely lifted, and by a 72,000 rise in jobs in administration and support services which includes temporary staff at recruitment agencies.
The headline unemployment rate for the three months to May stood at 4.8%, the Office for National Statistics said.
Economists polled by Reuters had mostly expected the unemployment rate to hold at 4.7% in the three months to April.
But the ONS said the population estimates used to calculate the unemployment rate had changed and the figure for the three months to April would have been 4.8% under the new system.
Thursday’s figures showed the fastest headline wage growth in the year to May since records began in 2000 although the comparisons have been skewed by greater job losses among low-paid workers and comparison with depressed wages a year ago.
Average weekly earnings in the three months to the end of May rose by 7.3% compared with a year earlier.
The ONS estimated underlying wage growth, excluding distortions caused by the pandemic, was between 3.9% and 5.1% for average weekly earnings. For average earnings excluding bonuses it was between 3.2% and 4.4%.
The pick-up in hiring and in pay added to signs of how fast Britain’s economy is bouncing back from its nearly 10% crash last year when it was hit by one of the world’s heaviest COVID death tolls and long lockdowns.
BoE Deputy Governor Dave Ramsden said on Wednesday that the central bank might start to think about reversing its huge monetary stimulus sooner than he previously expected.
British inflation might rise as high as 4% “for a period later this year” - double the BoE’s target - and the factors driving it up might take some time to ease off, he said.
Reporting by William Schomberg and David Milliken
Source: Reuters