Pressure on the UK’s labour market increased over the winter, with official data showing the number of unfilled jobs rose to a record of more than 1.3mn as people continued to leave the workforce.
Businesses remained keen to hire. The Office for National Statistics said on Tuesday that the unemployment rate had fallen to 3.9 per cent in the three months to January, down from 4.1 per cent the previous quarter, while the employment rate had increased 1 percentage point to 75.6 per cent.
However, this left employment a full percentage point below its pre-pandemic level, because of an increase in the number of people who are economically inactive — neither in work nor looking for a job.
The ONS said the inactivity rate stood at 21.3 per cent, 1.1 percentage points higher than its pre-coronavirus level, with the latest increase driven by older workers opting out.
The data also showed the pressure that rising inflation is putting on both households and businesses. The ONS said average earnings excluding bonuses were 3.8 per cent higher than a year earlier over the November to January period — equivalent to a real terms fall of 1 per cent, after taking account of rising prices.
However, strong bonus payments mean that total pay had just kept pace with inflation, rising 0.1 per cent from a year earlier.
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