UK unemployment rate unexpectedly fell in Q1

According to the report from Office for National Statistics, January to March 2021 estimates show a quarterly decrease in the unemployment rate (the largest quarterly decrease since September to November 2015), while the economic inactivity rate increased, as it did during the first coronavirus (COVID-19) restrictions, and the employment rate increased for the first time since December 2019 to February 2020.

The UK employment rate was estimated at 75.2%, 1.4 percentage points lower than before the pandemic (December 2019 to February 2020) but 0.2 percentage points higher than the previous quarter.

The UK unemployment rate was estimated at 4.8%, 0.8 percentage points higher than December 2019 to February 2020 but 0.3 percentage points lower than the previous quarter.

The UK economic inactivity rate was estimated at 21.0%, 0.8 percentage points higher than December 2019 to February 2020 and 0.1 percentage point higher than the previous quarter.

Annual growth in average employee pay continued - driven in part by compositional effects of a fall in the number and proportion of lower-paid employee jobs.

Growth in average total pay (including bonuses) among employees for the three months January to March 2021 was 4.0%, and growth in regular pay (excluding bonuses) was 4.6%.

Average total pay growth for the public sector was 5.6%, whereas for the private sector was 3.7%; the large increase in public sector pay growth was mainly accounted for by a strong growth in the health and social work industry (5.8%).

All sectors saw positive pay growth in January to March 2021, however, within these sectors some industry groups have seen negative pay growth, for example, accommodation and food service activities (negative 7.0%).