British firms start hiring again on hopes vaccines will end lockdowns for good        

The number of employees recruited rose 68,000 in February as sustained furlough payments helped fuel recovery

Before Covid: Shoppers crowd London's Oxford St on the 'Black Friday' discount day in the lead-up to Christmas 2019. File picture

UK companies have started hiring in anticipation of an end to the coronavirus lockdowns, holding back the overall rate of unemployment.

The number of employees recruited rose 68,000 in February, the third consecutive monthly increase, the UK's Office for National Statistics (ONS) said, and job vacancies from December to February increased by 8% to a total of 601,000.

The jobless rate edged up to an official rate of 5% in the quarter through January, less than the 5.2% rate expected by economists. 

Glimmer of hope

It offers a glimmer of hope that the UK could soon start to recover from its worst recession in three centuries, helped by UK Chancellor of the Exchequer Rishi Sunak’s decision to prolong furlough payments to those whose workplaces were closed during the pandemic.

“The labour market is showing some signs of resilience,” said Tej Parikh, chief economist at the Institute of Directors, a lobby group representing company executives. 

“Vacancies are likely to start growing again meanwhile, as businesses look to bounce back as restrictions wind down,” the economist said. 

Positive outlook from CBI

The more positive tone was reinforced by a separate survey from the Confederation of British Industry, which showed manufacturing order books this month at their strongest since April 2019. 

Hanging over the outlook, however, are Brexit-related stock shortages and an expected pickup in prices as firms pass on higher global freight costs, the business lobby said.

The ONS report coincided with two separate national lockdowns, which closed all non-essential shops, bars and restaurants. 

The latest restrictions started in January. The total number of payrolled employees remains 693,000 lower than where it was in February 2020, just before the pandemic struck.

Protecting workers

Mr Sunak hopes that the wage subsidy programme, the most expensive part of an economic support package now totalling around £350bn (€407bn), will protect workers as the economy gradually reopens over the next three months. 

The chancellor announced in his budget this month that furlough payments will continue until the end of September, rather than end in April as previously planned.

“Coronavirus has caused one of the largest labour market shocks this country has ever faced, which is why protecting, supporting, and creating jobs has been my focus throughout this crisis,” Mr Sunak said in a statement. 

“The continued success of the vaccine rollout provides us with hope for the future,” the chancellor said.