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For further analysis of the emerging effect of coronavirus on the labour market, see Library briefing Coronavirus: Impact on the labour market.

In June-August 2021, the labour market continued its recovery. There was an increase in employment and a fall in unemployment from the previous quarter, along with a fall in redundancies and an increase in hours worked. Average pay continued to grow at a faster rate than inflation.

Young people have been particularly impacted by the pandemic, but over the last quarter 16-24 year olds have seen a strong increase in the employment rate and decrease in unemployment and inactivity rates.

Vacancies in July-September 2021 were at their highest level since records began, and are above pre-pandemic levels in every industry.

Key figures

  • In June-August 2021, the number of people aged 16+ in employment was 32.42 million, 235,000 more than the previous quarter but 49,000 fewer than the previous year. The employment rate was 75.3%, up from 74.8% in the previous quarter.
  • The UK unemployment rate was 4.5%, down from 4.8% in the previous quarter. Unemployment levels fell by 126,000 on the quarter to 1.51 million.
  • 8.72 million people aged 16-64 were economically inactive, down 91,000 from the previous quarter. The inactivity rate was 21.1%, down from 21.3% in the previous quarter.
  • Redundancies fell slightly from the previous quarter to 99,000.
  • Vacancies increased by 239,000 from the previous quarter to 1.10 million in July-September 2021.
  • Average wages increased in real terms in the three months to August 2021, with an annual change of 4.5% including bonuses and 3.3% excluding bonuses.

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