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ONS cites decreased economic activity  

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Growth in total pay increased by 4.3% 

According to the latest Labour Force Survey (LFS) published by the ONS, economic inactivity has increased by 0.1 percentage points to 21.2%.  

The increase in economic inactivity since the start of the pandemic was largely driven by those who are economically inactive because they are students or for “other” reasons, revealed the survey. In the latest three-month period however, those who are inactive because they are students continued to decrease, while the increase was driven by those who are inactive because of long-term sickness and “other” reasons. 

The UK employment rate, however increased by 0.1 percentage points on the quarter to 75.5%, while the number of self-employed workers remained low following similar decreases seen during the pandemic. The number of employees increased to another record high and job-to-job moves also reached record numbers in October to December 2021, driven by resignations.   

Decrease in unemployment  

The survey revealed that the number of payrolled employees also increased monthly in January to a record of 29.5 million while unemployment decreased by 0.2 percentage points to 4.1%.  

Growth in average total pay (including bonuses) was 4.3% and growth in regular pay (excluding bonuses) was 3.7% among employees in October to December 2021. In real terms (adjusted for inflation), total and regular pay fell on the year at negative 0.1% for total pay and negative 0.8% for regular pay. Previous months’ strong growth rates were affected upwards by base and compositional effects. These temporary factors have largely worked their way out of the latest growth rates, however, a small amount of base effect for certain sectors may still be present. 

Kirstie Donnelly MBE, CEO of City & Guilds commented: “With just 4.1% of the population unemployed, we are now nearly back to pre-pandemic levels of unemployment, but we’re by no means back to normality. The labour pool has shrunk dramatically thanks to the double impact of Brexit and the pandemic on our non-indigenous workforce. And the number of open job vacancies continues to increase as businesses struggle to recruit the skilled talent they need – now standing at a record 1,298,400, according to the ONS.”  

Paul Modley, Director of Diversity, Equity & Inclusion at AMS also made comment: “We are seeing more and more talent acquisition leaders encouraging hiring managers to rethink their qualification requirements which can often inadvertently limit the intake pool. While there is often a temptation to use language such as ‘demonstrate superior skills’ in a job description, by making small changes to use inclusive wording such as ‘demonstrate competence in…’, employers are far less likely to put off some candidates from applying. By challenging the language used in job specifications, businesses can make an immediate impact on their ability to tap into a wider talent pool at the very beginning of the recruitment process.” 

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