1M Job Vacancies And Soaring Wages Spur UK Inflation Fears

Job vacancies in the United Kingdom hit a record high last month and wages soared by 7.4% between April and June, adding to fears of a prolonged period of rising prices as companies pass on higher costs to consumers, Hanna Ziady reported for CNN Business.

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The strong recovery in the labor market was highlighted in data published Tuesday by the Office for National Statistics and it could further fuel inflationary pressures in the UK economy. That could prompt the central bank to hike interest rates as early as May 2022, according to some economists.

There were a record 953,000 vacancies in the United Kingdom on average over the three months to July — 168,000 more than the first quarter of 2020 before coronavirus restrictions were introduced. For July alone, vacancies may have exceeded one million for the first time based on early survey figures, according to Jonathan Athow, ONS deputy national statistician for economic statistics.

Vacancies in all industries increased, with arts, entertainment, and recreation posting the fastest rate of growth following the lifting of all remaining social distancing restrictions in England on July 19.

“The world of work continues to rebound robustly from the effects of the pandemic," Athow said in a statement. The unemployment rate fell 0.2 percentage points to 4.7%, according to the ONS.

Athow said that there were no signs of redundancies starting to pick up ahead of the end of the government's furlough program, which supports wages, at the end of next month.

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