A fast-growing job market
A confident Minister of Finance minister reveals the new UK growth forecasts: 6.4%, against the previously estimated 4%. Pragmatic, Rishi Sunak also announces lower growth forecasts to 6% in 2022, against 7.2% expected. Still, the British government strongly believes in recovery. According to the OECD, the UK should experience the fastest growing of the G7 countries. The Office of Budget Responsibility shares the same views. London's economy is expected to rise from the start of 2022.
Could these be the effects of Johnson's policy, or is it the economic situation being beneficial for the UK job market? The British labour market is still facing shortages, but it is about to return to near full employment. The unemployment rate currently stands at 4.5% against 5.2% at the end of last year. Recruitments have taken a leap since last September. Shortly before, the government announced the end of its funded partial unemployment program. Could this be a coincidence? Between August and September alone, some 207,000 people were hired, mainly in the hotel and catering industry. Employers are massively seeking help from temporary agencies.
Salaries have also risen by + 7.2% compared to October 2020. The National Statistical Office (ONS) rather expects growth of 4.1 to 5.6%, considering the job losses due to the Covid-19 pandemic and wage cuts. The current wage growth rate is higher compared to the pre-pandemic era (around 3%). Still, the government has to keep an eye on it to avoid any inflationary pressure. Besides, the Bank of England (BoE) reviewed its forecasts from 2 to 4% or more. The OBR even expects 5%, which would be the highest rate in the past three decades. Therefore, British authorities are optimistic that the labour could reach its highest level in 40 years.
The most in-demand jobs
All sectors are benefiting from the current growth. For more than a month, recruitments have risen significantly in the aviation sector, with job offers almost returning to their pre-Covid-19 level (barely 10% below the pre-pandemic level). The reopening of the borders, particularly the imminent reopening of the American borders, has boosted hiring. Flight attendants, aeronautical engineers and pilots are the most in-demand jobs.
There is also a considerable job increase in the real estate sector (+ 42% compared to February 2020), human resources (+ 33%), healthcare (+ 18% recruitment of nurses), veterinary services (+ 70%), education (+ 33%), sports (+ 63%), chemistry (+ 36% research for chemical engineers), social sciences (+ 64%). More than 85% of London employers are planning to hire in the next 12 months. With London, the whole territory is entering a new dynamic. Wales, West Midlands, Scotland, North East and East England, Yorkshire and Hummer also need human resources.
The return of expatriates?
Should we expect a massive return of expats to the UK? This remains uncertain for now, considering the Johnson immigration policy. In 2020, some 1.3 million to have left the country (including more than 700,000 in London alone). Since the “pre-settled” and “settled” have been introduced, foreigners have growing concerns. Moving to the United Kingdom seems more restrictive than before, but it is still possible. For example, more than 200,000 French nationals have applied for permanent residency in the UK. For others, being forced to choose a status means being deprived of one's liberty.
Beyond these considerations, the fragility of the economic recovery is pinpointed. Soaring prices for energy and basic necessities - especially in London - inflation, the resurgence of Covid cases, etc. Is 2022 really going to be better? It looks like everything will depend on the strength of the British economic recovery and the government's choices.
