UK Labour Market Report – August 2023
The UK labour market remained mixed in the three months from April 2023 to June 2023, with some positive signs, but also areas of concern.
Positively, the employment rate remained close to pre-pandemic levels, at 75.7%. The number of payrolled employees also continued to grow, reaching a record high of 30.2 million in July 2023.
However, the unemployment rate did increase, to 4.2%. This was driven by an increase in the number of people unemployed for up to 6 months.
The economic inactivity rate also decreased, to 20.9%. This was largely due to a decrease in the number of people who are inactive due to family or home life circumstances.
The number of job vacancies fell for the 13th consecutive quarter, to 1,020,000. However, this is still above pre-pandemic levels.
Annual growth in regular pay (excluding bonuses) was 7.8%, the highest we have seen since comparable records began in 2001. However, in real terms (adjusted for inflation), pay growth was only 0.5%.
Latest indicators at a glance
- Payrolled employees: The number of payrolled employees is now well above pre-pandemic levels
- Employment rate: The employment rate is down on the quarter but up on the year and is still pre-pandemic rates
- Unemployment rate: The unemployment rate is up on the year, and above pre-pandemic levels
- Inactivity rate: The economic inactivity rate decreased on the quarter and on the year and is still above pre-pandemic rates
- Redundancy rate: The redundancy rate increased on the quarter
- Hours worked: Total actual weekly hours worked decreased on the quarter
- Job vacancies: Vacancies decreased on the quarter but are above pre-pandemic levels
- Nominal earnings: For regular pay this is the highest annual growth rate we have seen since comparable records began
- Real earnings: Real pay shows a small positive annual growth rate for April to June 2023
What does this mean for the future?
It is too early to say what the long-term implications of these labour market trends will be. However, the Bank of England has warned that the UK economy is likely to slow down in the coming months, which could lead to further recruitment challenges.
If you are a candidate or a business and would like more information, please contact us on 01604 239555 or email info@impactrecruitment.co.uk and a member of our team will be in touch.
