© Reuters. FILE PHOTO: A worker arrives at his office in the Canary Wharf business district in London Feb. 26, 2014. REUTERS / Eddie Keogh / File Photo
LONDON (Reuters) – The number of employees on UK companies' payrolls rose a record 197,000 in May as COVID restrictions were eased and pubs and restaurants resumed office work, tax data showed on Tuesday.
The headline unemployment rate for the three months to April fell to 4.7%, the bureau of national statistics said, in line with economists' forecasts in a Reuters poll and the lowest level since August.
The fall in the unemployment rate in April was the fourth in a row, with the number of people in work increasing by 113,000. Economists polled by Reuters had forecast an increase of 150,000.
The UK's unemployment rate has been kept low by the government's vacation program. This paid wages for 8.9 million jobs at its peak in May 2020, during the first COVID lockdown, and supported 3.4 million jobs in April 2021.
More recent ONS survey data indicated a further decline to just over 2 million jobs by mid-May.
"The latest unemployment projections are about half of what was feared, and the number of employees on the payroll is at its highest level since April last year," said Finance Minister Rishi Sunak.
The Bank of England forecast last month that unemployment would rise only marginally if the vacation regime ends in late September 2020.
However, the situation for many employers and employees in the hospitality industry will be more difficult than expected in the coming weeks. A lifting of indoor capacity restrictions planned for June 21 has been postponed to July 19 due to the spread of a new, more contagious variant of COVID.
Average weekly earnings in the three months to the end of April rose by 5.6% year-on-year, the strongest increase since March 2007 and above forecasts.
The ONS said that this rate was skewed by the fact that large numbers of lower paid employees were still receiving reduced vacation pay.
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