Uncertainty surrounding the effect of the end of the UK furlough scheme on unemployment had been top of the Bank of England’s (BoE) list of economic concerns, but last week’s jobs data provided reasons to be optimistic on this front. The October report showed that payrolls increased at a healthy pace, the number of benefit claims fell and vacancies sit at a record high – all pointing to a non-disruptive finish to a scheme that has preserved the livelihoods of millions of people. But many consumers will now be feeling the pinch from rising inflation. The headline and core annual inflation rates both rose, to 4.2% and 3.4%, respectively, and look set to rise further into next year. With uncertainty around the end of the furlough scheme diminishing and price pressures firming, this should lead the BoE to hike interest rates at its December meeting.

UK payrolls point to smooth ending of furlough scheme

Payrolled employees, millions