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UK job vacancies rise for fifth month, adding to pressure on pay

UK job vacancies rise for fifth month, adding to pressure on pay
Pedestrians pass a closed entrance to Westminster Underground Station during a one-day strike by Tube workers in London, UK, on Friday, 19 August 2022. (Photo: Carlos Jasso / Bloomberg)

UK job vacancies rose for a fifth month, boosting salaries and signalling tightness in the labour market that’s likely to fan inflation, data from the search engine Adzuna showed.

The jobs search site listed 1.06 million vacancies across the UK in June, up 0.78% from the month before but 12% lower than a year ago. It said advertised salaries rose 3.6% from a year ago to £37,807, and the number of days to fill open positions fell to a record low.

The figures indicate companies are still struggling to hire the staff they need and are likely to bid up wages, adding to the risks of an inflationary spiral. The Bank of England is watching the jobs market carefully to gauge how much further it needs to raise interest rates to prevent a wage-price spiral.

“Despite the recent small rises in unemployment, the labour market is still incredibly tight,” Tony Wilson, a director at the Institute of Employment Studies, said in the Adzuna report released Monday. “This poses risks for future inflation. It’s also a reminder that the economy is still creating a lot of opportunities and many of them are well paid.”

Adzuna’s data marks a sharp contrast with figures from Reed Recruitment, which found vacancies in England fell by about a third from its post-pandemic high to 148,200 in the three months through May. Chairman James Reed said earlier this month a “significant” decline in listings over the past year increases the chances the UK will slip into recession.

The report from Adzuna is based on every job vacancy advertised in the UK across 1,000 sources. Its co-founder, Andrew Hunter, was more upbeat about the outlook for the economy.

“If hiring trends continue to improve, we could be back at the record hiring levels we saw in 2022 by the end of the year.” Hunter said in a statement. “Competition is high amongst employers looking to snap up the best candidates.”

Official labour market statistics earlier this month showed unemployment rose unexpectedly to 4% in the three months through May. Wage growth accelerated to 7.3% from a year ago over the same period, well above the comfort level the BOE says is compatible with its 2% inflation target.

Adzuna further found that the teaching sector had the largest active vacancy numbers — more than 120,000 — and that it filled roles the fastest, taking 30.7 days compared to the overall 34.6. The increase in vacancies was linked to the close of the academic year, which marks the start of the peak hiring season in schools.

London remained the only part of the country without a bump in pay. The biggest annual salary increase was recorded in property, a sector which saw a decline in vacancies year on year. 

A separate report from the Recruitment and Employment Confederation last week also pointed to stronger hiring despite concerns about rising prices and interest rates. 

The REC reported a strong demand for workers, with the number of active job postings rising 53.3% year on year to 2.2 million in the week of July 3-9.

“New job adverts are coming to the market at a steady rate, and activity levels overall remain high,” Chief executive Neil Carberry said. “Employers should be working to integrate their people and commercial plans, re-designing roles and making sure their offer is competitive.” DM

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