Employers scrambling to hire staff amid widespread labour shortages after lockdown helped to return the number of workers on company payrolls to pre-pandemic levels in August, official figures show.
The Office for National Statistics said the number of payroll employees increased by 241,000 to 29.1 million in August, lifting employment in all regions of the UK to pre-Covid levels except in London, Scotland and south-east England.
It came as the number of job vacancies soared to more than 1m in August for the first time since official records began in 2001, rising by 35% in the space of three months across all sectors of the British economy.
Reflecting difficulty hiring staff after lockdown for a wide range of businesses across Britain, the ONS said the largest increase was in accommodation and food services – the sector which includes hotels, pubs and restaurants – with a 75% increase over the past three months.
Business leaders have warned that shortages of workers and raw materials will hold back Britain’s economic recovery from the pandemic, with lobby groups calling for looser post-Brexit migration rules to enable firms to hire more staff from the EU.
The number of EU nationals working in Britain has dropped during the pandemic as many workers returned to their home countries, while ongoing concerns around Covid, pandemic restrictions, and post-Brexit migration rules have limited their return.
Despite the rise in the number of payrolled employees in August, which is collected from HMRC data, the ONS said employment in the UK still remained below pre-Covid levels in official data gathered in its labour force survey in the three months to July.
Unemployment was estimated at 4.6%, a drop of 0.3 percentage points on the previous quarter but still 0.6 percentage points higher than before the pandemic struck.
Employment, which measures the proportion of people aged 16 to 64 in work, rose steadily to 75.2% in the three months to the end of July, but remains 1.3 percentage points lower than pre-Covid levels.
The official headline rates differ from the HMRC payroll numbers because they are based on surveys rather than company filings and cover a three-month period. The HMRC figures also exclude self-employment and may double count some workers who have more than one job.
About 1.6m jobs were still furloughed at the end of July, according to the latest data published by HMRC last week, with the highest numbers in sectors of the economy where pandemic restrictions are toughest. More than half of the total workforce in air passenger transport remains on furlough, while there are also large numbers in the arts and leisure industries.
Nye Cominetti, the senior economist at the Resolution Foundation, said self-employment remains 700,000 down on pre-Covid levels, adding that as many as 1 million employees could still be on furlough when the scheme closes at the end of this month.
“There is still ground to make up in the labour market. With the furlough scheme ending