Labour Market Overview UK - February 2023

14th February 2023

The UK employment rate was estimated at 75.6% in October to December 2022, 0.2 percentage points higher than the previous three-month period. The increase in employment over the latest three-month period was driven by part-time workers.

The most timely estimate of payrolled employees for January 2023 shows another monthly increase, up 102,000 on the revised December 2022 figures, to 30.0 million.

The unemployment rate for October to December 2022 increased by 0.1 percentage points on the quarter, to 3.7%. In the latest three-month period, the number of people unemployed for up to six months increased, driven by people aged 16 to 24 years. Those unemployed for over six, and up to 12, months also increased, while those unemployed for over 12 months decreased in the recent period.

The economic inactivity rate decreased by 0.3 percentage points on the quarter, to 21.4% in October to December 2022. The decrease in economic inactivity during the latest three-month period was driven by people aged 16 to 24 years. Looking at economic inactivity by reason, the quarterly decrease was driven by those inactive because they are students, retired, or long-term sick.

Flows estimates between July to September 2022 and October to December 2022 show that there was a record-high net flow out of economic inactivity, driven by people moving from economic inactivity to employment.

In November 2022 to January 2023, the estimated number of vacancies fell by 76,000 on the quarter to 1,134,000, the seventh consecutive quarterly fall since May to July 2022. The fall in the number of vacancies reflects uncertainty across industries, as survey respondents continue to cite economic pressures as a factor in holding back on recruitment.

Growth in average total pay (including bonuses) was 5.9% and growth in regular pay (excluding bonuses) was 6.7% among employees in October to December 2022. For regular pay, this is the strongest growth rate seen outside of the coronavirus (COVID-19) pandemic period. Average regular pay growth for the private sector was 7.3% in October to December 2022, and 4.2% for the public sector; outside of the height of the coronavirus pandemic period, this is the largest growth rate seen for the private sector.

In real terms (adjusted for inflation), growth in total and regular pay fell on the year in October to December 2022, by 3.1% for total pay and by 2.5 for regular pay. This is smaller than the record fall in real total pay we saw in February to April 2009 (4.5%), but remains among the largest falls in growth since comparable records began in 2001.

There were 843,000 working days lost because of labour disputes in December 2022, which is the highest since November 2011.

Note
Read the full report HERE