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Omicron expected to impact UK employment

14 December 2021

Our UK employment experts comment on the latest labour market figures and analyse the potential impact of the new Omicron variant. Read more.

Joanne Frew, Global Deputy Head of Employment & Pensions at DWF, comments on the ONS labour market figures published today. She said: 

"The latest ONS figures show a steady improvement in the labour market.  The headlines for the period between August and October 2021 show the UK employment rate was estimated at 75.5%, 0.2% higher than the previous quarter.  The UK unemployment rate was estimated at 4.2%, 0.4% lower than the previous quarter.  There were limited government restrictions between August and October giving the economy a much-needed opportunity to recover.

"This is also the first set of figures to include some element of the impact of the closure of the Coronavirus Job Retention Scheme (CJRS) at the end of September 2021.  It is encouraging to be able to report that the labour market has remained robust so far, despite the withdrawal of support.  However, the ONS goes on to report that it is possible that those made redundant at the end of the CJRS will be included in the Real Time Information (RTI) data for a few further months, while they work out their notice period.  

"With the Prime Minister declaring an 'Omicron emergency' and a raft of further restrictions being introduced we can expect the labour market figures to be impacted.  In particular, the hospitality industry is likely to be hit hard with Christmas parties being cancelled following concerns over the new variant.  With an unprecedented drive on booster vaccinations we watch with hopeful anticipation that this will be sufficient to prevent a January lockdown and further job losses in the New Year."

'Encouraging' labour market data in Scotland

Ann Frances Cooney, an employment law Partner at DWF leading the Scottish employment law practice, comments on today's Labour Market Trends. She said:
 
"The latest labour market figures for Scotland remain encouraging, with clear positive indicators of a downturn in unemployment and an upturn in employment. The headline figures for August to October 2021 show an estimated unemployment rate of 4.1%, down 0.2% over the quarter.  By way of comparison Scotland's unemployment rate was slightly lower than the UK rate of 4.2%.  The estimated employment rate was 74.6%, 0.5% higher over the quarter. Scotland's employment rate was below the UK rate of 75.5%. There were fewer restrictions in Scotland between August and October giving the economy a much needed opportunity to recover. This is the first set of figures to include some element of the impact of the closure of the Coronavirus Job Retention Scheme (CJRS) at the end of September 2021. It is encouraging to be able to report that the labour market has remained robust so far, despite the withdrawal of support.

"With the Scottish government reviewing the country's Covid restrictions on a daily basis due to the Omicron variant we can expect the labour market figures to be impacted. In particular the hospitality industry is likely to be hit hard with Christmas parties being cancelled following concerns over the new variant. With an unprecedented drive on booster vaccinations we watch with hopeful anticipation that this will be sufficient to prevent a January lockdown and further job losses in the New Year."

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