BoE policymaker says stimulus could end early; US jobless claims at pandemic low– as it happened

Graeme Wearden

from on 2021-07-15 15:06 (#5M7BF)

Rolling coverage of the latest economic and financial news

Latest: Initial claims falls to 360,000 last week as labor market recovers

Earlier:

Michael Saunders says QE stimulus may be curtailed soon
Saunders: Activity recovering a bit faster than expected
UK payrolls surged in June.. Vacancies jump too
North East, North West, East Midlands and Northern Ireland now over pre-pandemic payroll levels

4.06pm BST

And finally... European stock markets have had a rough day, as inflation worries and pandemic angst hit shares again.

In London, the FTSE 100 index is down 83 points or 1.1% in late trading at 7008 points, while the pan-European Stoxx 600 has lost 0.95%.

Michael Saunders' speech acknowledges that inflationary pressures have surprised to the upside in the past few months. Any change in Bank of England policy still requires a majority of the Monetary Policy Committee to agree, but Saunders lays out the argument now building among the Bank's rate-setters that some stimulus may need to be withdrawn in the months ahead.

This should be unsurprising, but markets are likely to take the news badly. The most recent moves in monetary policy have been to loosen and were made last year in the face of a Covid-induced economic shock when we did not know when or if vaccines could lead us out of the pandemic. We can now see a path to normality so the reversal of some stimulus is logical.

3.59pm BST

A rotation, or an impending market breakdown?

About half of S&P 500 stocks are trading under their 50-day moving averages.

BUT, many stocks < 50-DMAs are financials, energy and materials. ~80% of S&P stocks in tech, real estate and utilities are above their 50-DMAs.

3.36pm BST

The UK's financial regulator is planning to increase its presence outside the capital by basing staff in Cardiff, Belfast and Leeds for the first time, as it follows the Bank of England and the Treasury's attempts to become less London-centric.

The Financial Conduct Authority, which also expects to double its headcount in Edinburgh to 200 staff over the next two years, said the moves were meant to reflect the fact that it supervises companies across the country, not only in the City of London.

Alongside our ongoing strong commitment to presences in London and Edinburgh, we are developing a national location strategy."

3.35pm BST

British government bonds tumbled on Thursday after Bank of England policymaker Michael Saunders said the central bank might call time early on its asset purchase programme, pushing two-year yields to their highest since April 2020, Reuters reports.

Rate-sensitive two-year gilt yields rose almost 8 basis points on the day to 0.161%, pushing past a previous high set in late June to their highest since April 2020, not long after the BoE restarted purchases of government bonds.

3.21pm BST

Wall Street has opened lower, despite the encouraging drop in jobless claims.

The S&P 500 index has dipped by 0.25% to 4,367 points, down 6 points, while the Dow is flat and the Nasdaq composite is down 0.2%.

3.04pm BST

Back in the UK, Tesco and John Lewis have joined Waterstones and Sainsbury's in recommending that customers and staff continue to wear face masks in their shops in England beyond 19 July despite an easing of mandatory safety measures relating to Covid-19.

A Tesco spokesperson said it was asking customers and staff to be on the safe side" and encouraging" them to wear masks. The company added that other measures such as limiting customer numbers in stores and separate entrances and exits would also continue.

Since the start of the pandemic, we have focused on ensuring everyone can get the food they need in a safe environment. Having listened to our customers and colleagues, we will continue to have safety measures in place in our stores; these include limiting the number of people in store at any time, protective screens at every checkout, hand sanitiser stations and regular cleaning."

2.32pm BST

June industrial production a bit softer than expected at +0.4% vs. +0.6% est. & +0.7% in prior month (rev down from +0.8%) ... factory production -0.1% vs. +0.9% prior; utilities +2.7% and mining +1.4% pic.twitter.com/h0XoBFTnCa

US industrial production modest +0.4% in June Supply constraints

#Manufacturing -0.1%
Autos -6.6%: ongoing semiconductors issues
Ex-autos +0.4%
Equipment & appliances

#Mining +1.4%

Utilities +2.7%

IP +9.8% y/y 1.2%<pre #Covid
Manuf +9.8% y/y 0.8%<pre #Covid pic.twitter.com/P1c6E8642O

2.30pm BST

The global shortage of semiconductors continues to hit car production in the US, new data shows.

US industrial production growth slowed in June, up 0.4% after a 0.7% rise in May, the Federal Reserve reports.

Industrial Production in the United States increased 0.40 percent in June of 2021 over the previous month. https://t.co/d2vCgluAuV pic.twitter.com/IjCi676PLc

The global shortage in semiconductors, the microchips that are an essential component in every electronic device in the world, started as a temporary delay in supplies as chip factories shut down when the coronavirus pandemic first hit.

2.04pm BST

Factory activity in New York state has jumped at a record pace, according to the latest Empire State manufacturing survey.

The July Empire State Manufacturing Survey indicates that manufacturing activity surged at a record-setting pace in New York State. The general business conditions index rose 26 points to 43.0. https://t.co/psUPHT8E8l pic.twitter.com/2HVFWTKzli

Manufacturing activity continued at a record pace, according to the Empire State Manufacturing Survey, with the composite index jumping from 17.4 in June to 43.0 in July. pic.twitter.com/1vLEE9FfCS

Input costs pulled back for the second straight month from May's record growth rates, but 78.8% of respondents continued to suggest that raw material prices were higher for the month, a very solid pace of acceleration.

At the same time, the index for selling prices soared to an all-time high in July. With supply chain challenges lingering, delivery times once again narrowed to the slowest on record.

US Initial jobless claims printed at 360K, above expectations of 350K.

Separately, the Philly Fed Manufacturing index came in at 21.9, below expectations of a 28.1 reading.

The #USD is ticking lower in the initial reaction to these soft reports. $DXY

US JULY PHILLY FED MFG SURVEY: EMPLOYMENT INDEX 29.2 VS 30.7/JUNE. WORKWEEK INDEX 18.4, - 2 PTS #PhillyFed #manufacturing pic.twitter.com/gisQumd1bJ

1.43pm BST

The number of Americans filing new claims for jobless support has fallen to its lowest since the pandemic began.

There were 360,000 initial claims' for unemployment insurance last week, a sharp drop on the (upwardly revised) 386,000 jobless claims made in the previous seven days [these are seasonally adjusted].

Unemployment Insurance Weekly Claims

Initial claims were 360,000 for the week ending 7/10 (-26,000).

Insured unemployment was 3,241,000 for the week ending 7/3 (-126,000).https://t.co/ys7Eg5LKAW

LAYOFF WATCH: U.S. unemployment claims fall 26,000 to 360,000 in week of July 10 - a new pandemic low. They've been falling gradually this year in fits and starts. Initial jobless claims still more than double pre-pandemic levels, however. Labor market healing slowly ...

U.S. weekly initial jobless claims now only around 150K above pre-crisis levels pic.twitter.com/Zu88iXmpcK

Regular continuing claims (nsa) fell. Good direction but it's complicated to tell if this is because claimants found a job or exhausted benefits. I used to look at PEUC in tandem, but with various states ending the federal UI programs, its a much more complex picture now. pic.twitter.com/o4fHmX1T4r

1.34pm BST

The banking and payments app Revolut has become the most valuable British fintech firm on record after a fresh funding round pushed its valuation to $33bn.

The company, founded by the former Lehman Brothers trader Nik Storonsky in 2015, announced on Thursday that it had raised $800m (579m) from new investors Tiger Global Management and the major Japanese investment group SoftBank, which now hold a near 5% stake in the business.

1.23pm BST

The Bank of England may need to step in with early action to deal with rising inflation if price pressures persist, one of Threadneedle Street's policymakers has said.

Michael Saunders, one of eight members of the Bank's monetary policy committee, said on current trends it might become appropriate fairly soon" to rein in some of the stimulus provided to support the economy since the start of the pandemic.

1.11pm BST

Saunders' speech marks a change of tune", and signals that the Bank of England could end its net asset purchases as soon as next month instead of in December, says Kallum Pickering of Berenberg Bank.

Pickering also suggests that UK interest rates could rise earlier than in August 2022:

Of course, Saunders' view may not be widely shared among the other members of the policy committee. However, as central banks often use such speeches to fine tune guidance and prepare markets for a policy change, the speech suggests that the BoE will at least discuss at their next meeting on 5 August whether to end net asset purchases early instead of in December.

In our view, given recent upside surprises to inflation, building pressure in the labour market and the outlook for continued strong growth even after the economy reaches its pre-pandemic level of output, ending the stimulus early would be the correct course of action.

12.51pm BST

The yield, or interest rate, on UK government bonds rose after Michael Saunders' comments - as traders anticipated the prospect of the UK's QE scheme ending early.

@jsblokland
Breaking News | Bank of England's Saunders: withdrawing #stimulus may be appropriate soon.

#teamkong pic.twitter.com/jpDj9rUTUt

#GBPUSD spiked almost 70 pips in the last 30 minutes after the comments from #BOE policymaker Michael Saunders.

"It may become appropriate fairly soon to withdraw some #stimulus" - Saunders said.

Key levels to watch: 1.39/40 1.3840/00#GBP #EURGBP #GBPJPY #forex #inflation pic.twitter.com/jQrqR57NMs

12.43pm BST

Michael Saunders' suggestion that QE could be curtailed soon comes a day after Bank of England deputy governor Dave Ramsden said the BoE might start to think about reversing its huge monetary stimulus sooner then expected.

Bloomberg says there is a change in tone" among members of the rate-setting Monetary Policy Committee:

That suggests the panel will debate an early end to this year's 150bn ($208bn) bond purchase program, a move that would put the BOE in the vanguard of global central banks in withdrawing stimulus.

This is a notable shift," said Jordan Rochester, a currency strategist at Nomura International Plc. We'd label Saunders an activist more willing to shift his view in light of the prevailing data rather than being stuck in his ways."

The Bank of England may have to consider curtaining its stimulus program in the next month or two" to contain inflation as the economy rebounds, says policy maker Michael Saunders https://t.co/MdPclGJxsj

12.03pm BST

The Bank of England may need to stop its bond-buying stimulus programme earlier than planned, due to the risk of rising inflation, according to policymaker Michael Saunders.

In a speech this morning, Saunders says that activity appears to have recovered a bit more than expected" back in May, when the Bank drew up its latest economic forecasts.

In my view, if activity and inflation indicators remain in line with recent trends and downside risks to growth and inflation do not rise significantly (and these conditions are important), then it may become appropriate fairly soon to withdraw some of the current monetary stimulus in order to return inflation to the 2% target on a sustained basis.

August MPC suddenly a live meeting following comments from Ramsden and Saunders in last 24hrs. Any early end to asset purchases (our view since early June) won't get universal support but would be indicative of progress back towards pre-COVID output & rising inflation pressures

BoE's Saunders - Withdrawing stimulus may be appropriate soon. Options may include ending QE in the next month or two. Risks lie on the side that the output gap will close earlier than previously expected. #sterling #gbp @DailyFX

Activity appears to have recovered a bit more than expected. And, even relative to this improving trend, there have been large upside surprises in prices and indicators of labour market tightness.

At present, it seems likely that CPI inflation will exceed 3% year-on-year late this year.

A modestly tighter stance...would help ensure that inflation risks 2-3 years ahead are balanced around the 2% target, rather than tilted to the upside (which I suspect is the case with the current policy stance).

And it should help ensure that the prospective further rise in inflation above target later this year does not feed through to a damaging rise in medium-term inflation expectations. It would still leave in place considerable stimulus and hence probably not derail the welcome recovery in the economy: it would be more akin to easing off the accelerator rather than applying the brakes.

So for me, the question of whether to curtail our current asset purchase program early will be under consideration at our forthcoming meetings.

CENTRAL BANK KLAXON: Hawkish BOE commentary today from Saunders talking about possibility of ending asset purchases early and/or "further monetary policy action" next year! $GBP pic.twitter.com/1H909CjzXa

Michael Saunders has given a speech about developments in the economy, the outlook and the appropriate setting of monetary policy.

Read the speech here:https://t.co/sh2Stn1POB

11.10am BST

The number of UK workers on furlough has also dropped again, the ONS says:

The proportion of businesses' workforce reported to be on full or partial furlough leave fell to 5% in late June 2021 (provisional range of 4% to 6%) as a result of coronavirus (COVID-19) restrictions being relaxed across the UK; and the proportion of the workforce reported to be on partial furlough is now higher than on full furlough.

FYI, the @ONS has confirmed this today, though they wisely put a wide range on the estimate for the number of people on #furlough ("1.1 to 1.6 million") to reflect the uncertainty... https://t.co/4koKMjCBJc

ps. this is good news too: more people on #furlough are now doing at least some work... pic.twitter.com/Zz0iShrK7H

11.05am BST

Consumer spending on credit and debit cards in the UK has fallen month-on-month for the first time this year.

The latest real-time indicators of economic activity, from the ONS, show that credit and debit card spending dropped 4% in June with May 2021. That takes it down to 95% of its February 2020 average level.

The seven-day average number of daily flights in the week to 11 July 2021 increased by 9% compared with the previous week to 2,307 flights, according to @EUROCONTROL.

This is around one-third of the level seen in the equivalent week of 2019 https://t.co/invrYLoLpL pic.twitter.com/XfCS6PLH0Y

Online job adverts on9 July 2021had decreased by 4%comparedwiththe same time a week ago, according to@Adzuna.

The volume remains substantially above pre-pandemic levels at 129% of its February 2020 average level https://t.co/lChyYUCnNy pic.twitter.com/4fI7EYman0

10.24am BST

Sales at Asos climbed by almost a fifth in the last quarter but the online fast-fashion retailer has warned that there is still significant short-term uncertainty ahead due to the Covid-19 pandemic.

Bad weather and ongoing uncertainty mean ASOS' UK sales trends weakened towards the end of June. This is to be expected - if there's any doubt about when so-called freedom-day is going to happen, its young, core customers will hold off on buying party dresses. Heavy rain means less socialising too. With restrictions set to ease in the coming days, we could see increased demand as people gear up to hit bars and clubs once more.

There is a lot resting on sales regaining some of the lost ground, with the market clearly disappointed in the uncertainty pointed out in ASOS' trading statement. Next quarter will be crucial because it will give a better indication of the sales pace ASOS can achieve in more normal times. By that point there should be even more clarity on social activity, and a clearer view of the shape of ASOS' future should come into focus. It's possible that as customers become busier and not confined to their sofas, they'll be scrolling the ASOS app less frequently, and therefore purchase less. What these different dynamics will mean for the numbers over the medium term is yet to be seen.

10.11am BST

Despite Avast's gains, the FTSE 100 index is only slightly higher this morning at 7095 points, up 0.05%.

Energy companies are dragging the index down, with BP (-2.4%) and Royal Dutch Shell (-1.7%) following the crude price lower.

Oil extended losses after U.S. gasoline stockpiles unexpectedly expanded, while the UAE neared getting a better OPEC+ deal https://t.co/vFFnicHuMH #OOTT pic.twitter.com/ci8QqryDKy

The UAE is nearing a deal that could give the nation a more generous output limit next year and allow OPEC+ to lift supply in coming months https://t.co/MtyJTnBINZ #OOTT

10.00am BST

Shares in cybersecurity company Avast have jumped 13% this morning after it confirmed it is in advanced talks over a takeover by rival NortonLifeLock.

The Board of Avast confirms that it is in advanced discussions regarding a possible merger of Avast with NortonLifeLock Inc.

There can be no certainty as to whether any transaction will take place or the terms on which any Possible Merger may be agreed. A further announcement will be made if and when appropriate.

Avast's shares have been on a broadly upwards but still bumpy path since its own listing in 2018. Recent weakness in the share price may have alerted its rival Norton to the possibility of a tie-up and its approach continues the current wave of foreign M&A interest in British firms.

While news of the bid will generate excitement in the short term, the UK's already very modest-sized technology sector can ill-afford to lose one of its leading constituents.

9.26am BST

The UK's competition watchdog has imposed fines totalling more than 260m on pharmaceutical companies after an investigation found that they overcharged the NHS for hydrocortisone tablets for almost a decade.

The Competition and Markets Authority (CMA) found that the drug's makers Auden Mckenzie and Actavis UK, now known as Accord-UK, used their position as the sole providers of hydrocortisone to inflate the price of the drug.

The actions of these firms cost the NHS - and therefore taxpayers - hundreds of millions of pounds."

This is really serious stuff- it cost the NHS - and therefore you as the taxpayer- hundreds of millions of pounds

At one point the NHS was being charged over 80 for a single pack of tablets that had previously cost less than 1

CMA: These were egregious breaches of the law that artificially inflated the costs facing the NHS, reducing the money available for patient care"

Scale of what they did is breathtaking!

They increased prices by 10,000%

Price of a single 10mg pack:

70p in 2008 88 in 2016

NHS was spending 500k a year in 2008 over 80m by 2016

Money that could have been spent on patient care

9.24am BST

Rishi Sunak said Britain's economy was bouncing back after the latest official figures showed the number of workers on payrolls surged in June by 356,000, my colleague Larry Elliott writes.

While the number of employees remained more than 200,000 below the level before the start of the pandemic, data from the Office for National Statistics (ONS) showed the easing of restrictions on businesses had an impact on hiring in recent months.

The labour market is continuing to recover, with the number of employees on payroll up again strongly in June. However it is still over 200,000 down on pre-pandemic levels, while a large number of workers remain on furlough.

Our first, more detailed, local figures show that since November last year, when the number of employees reached a low point nationally, the biggest growth was seen in Leicester, while the smallest was in south Hampshire.

9.17am BST

Melissa Davies, chief economist at Redburn, cautions that the UK labour market is weaker than today's upbeat data suggests:

UK unemployment stands at 4.8% in June, wages are rising at 7.3% year on year and vacancies exceed pre-pandemic levels. But these upbeat data belie a much weaker labour market with plenty of spare capacity, propped up by the remains of the furlough system.

Wage growth is being literally inflated by lockdown comps and compositional effects. Labour force participation and hours worked are still substantially lower than before the pandemic.

9.02am BST

Tony Wilson, director of the Institute for Employment Studies, says the UK risks a two speed" jobs recovery, with long-term unemployed missing out on the opportunities to return to work.

Today's figures show that the jobs recovery continued to pick up pace through spring as restrictions eased. As we expected, the single-month estimate of job vacancies for June was the highest figure ever recorded, smashing the previous record and driven by rises across nearly all industries.

Payrolled employment also saw its strongest ever growth, with young people particularly benefiting. However despite this good news, long-term unemployment continues to rise - hitting its highest in more than five years, with long-term unemployment for older workers now at its highest since 2014.

Today's jobs stats: Highest EVER single month figure, nearly a million in June. Driven by rises across (nearly) all industries as restrictions ease.
But - still twice as many jobseekers as openings, w/ long-term unemployment still rising. Quick thread 1/ pic.twitter.com/cKtgFVVzxW

PAYE data on employee jobs first. This is what a U-shaped recovery looks like. Up by a huge 350k in June, closing more than half of the outstanding 'gap' in employee jobs in a single month. Big qn is whether this continues as we fill vacancies... 2/ pic.twitter.com/lLThnFgitk

Hooray, young people particularly benefited from most recent month's growth in PAYE jobs (grey bars below). About half of all growth in June was under-25s. Great news. But... they're still 'hardest hit', and still acct for about two thirds of the outstanding gap 3/ pic.twitter.com/7CpdR7d4RW

The huge PAYE jobs growth is unsurprisingly being driven by new job starts, rather than fewer exits. June saw highest job starts by miles. Note these figs are invariably revised down the next month, but will still be highest blue bar ever (NB includes job changers) 4/ pic.twitter.com/oO3va7eEO1

On the official Labour Force Survey data though, which lags HMRC data by a month (and uses rolling averages) things are a bit more subdued. Employment edging up, unemployment edging down (the yellow single month figures a bit better, but still...) 5/ pic.twitter.com/RwHlM6ntRU

... and looking at the changes in the first year of the crisis versus the most recent quarter, below shows that the LFS isn't showing anything like the recovery in the PAYE data. ONS has reweighted these, so still a bit of a conundrum (will come back to inactivity) 6/ pic.twitter.com/ddF22iKMp4

Much of this conundrum is explained by self-employment: not captured in PAYE, but down 750k on LFS (lowest since 2013). Previous briefings have set out that many have likely reclassified as employees/ moved jobs. But neither self-empl nor employees showing much recovery in LFS 7/

This graph shows how LFS employment has changed - men top graph, women bottom. Huge falls for men overall, driven by self-employment. Full-time employee jobs recovering. For women, big falls in part-time work offset by rising full-time. P/T work for women is now lowest ever 8/ pic.twitter.com/tHsRfKCfw2

We explored the impacts of crisis on women working part-time in this report with @Timewise_UK.
Big risks that recovery sees less flexibility for those who need it most. But with now a million vacancies, it makes business sense to be flexible too... 9/ https://t.co/ghLnWvKT7m

Back on the stats. If today's fig are pretty positive overall, here's the bad news. Long-term unemployment is STILL going up. Every month, it's "highest since" - today, it's Q1 2016. Rising fastest for older workers.
A MILLION vacancies but we're leaving these people behind. 10/ pic.twitter.com/iK9pDrAPxO

8.49am BST

Resolution Foundation CEO Torsten Bell says today's jobs data is strong - but also shows the labour market has not yet recovered:

Strong labour market stats this morning - 356,000 rise in payroll employment in June (bucks trend of slowing recovery in late June in some other data) pic.twitter.com/RkljoHwT65

Good news for the PM on day of his levelling up speech: North East, North West, East Midlands and Northern Ireland now have payroll employment back to pre-crisis levels (note total hours worked still well down given falls in self-employment/hours worked)

Note high vacancies are being matched by record flows into work ie jobs are getting filled rather than it being impossible to hire as some headlines would have you believe.

Don't start thinking this is job done - hours worked remained 4.4% down in May (something we'd normally see in a recession). Focus on payroll employees is hiding fall in self-employment and fact that furloughed workers are on payrolls but doing no/fewer hours.

8.35am BST

Chancellor of the Exchequer, Rishi Sunak, says today's jobs figures show the economy is rebounding:

As we approach the final stages of reopening the economy, I look forward to seeing more people back at work and the economy continuing to rebound.

We are bouncing back - the number of employees on payrolls is at its highest level since last April and the number of people on furlough halved in the three months to May.

In the past year we have supported over 14.5 million people across the country through our Plan for Jobs including through the Kickstart Scheme. We know that it's not been possible to save every job, but we have protected as many as we can, whilst helping new jobseekers through our DWP programmes to secure work.

There is still work to do as today's figures show, but importantly we're on the right track and pushing for recovery - with a sustained rise in the number of people on payrolls, including 135,000 more young people in work this month, and another rise in vacancies on offer as we continue on our roadmap."

Nearly half a million people have been unemployed for a year yet the Restart jobs scheme has been live for just three days.

Labour has a plan to buy, make and sell more in Britain so we can create the jobs of the future, nurture the skills we need and get our economy firing on all cylinders.

1. Strong set of labour market data as economy reopens. Record rise of 356k in payroll employment in June. Vacancies also remain above pre-pandemic levels. So far, so v-shaped? Yes, but... pic.twitter.com/UhYAh48jDO

2. Payroll employment still 206k below pre-pandemic levels. Long-term unemployment up around 50% to 449k. Signs of a disconnect between strong employer demand & those looking for work? Need to continue to ramp up employment support & boost retraining support for career switchers pic.twitter.com/0AC73qVrvk

8.29am BST

Another encouraging sign - the redundancy rate has dropped back to pre-pandemic levels, after hitting record levels in the second wave of Covid-19 late last year.

8.16am BST

The number of job vacancies has risen over its pre-pandemic level as UK firms try to hire staff to handle the increased demand as the economy reopened.

In April-June there were an estimated 862,000 job vacancies, the ONS says, a jump of almost 39% compared with the previous quarter.

Among the industries that saw a growth in vacancies on the quarter, the most notable was arts, entertainment and recreation, up 330.4%. It is also notable that five industries displayed a record number of vacancies from April to June 2021 with accommodation and food service activities increasing the most by 73,400 on the last quarter to 102,000.

In this sector there is evidence of a shortage of skilled staff and of employees finding alternative areas of employment prior to the sector reopening.

There were 862,000 job vacancies in March to May 2021, now above the pre-pandemic level.

Sectors such as arts and entertainment" and accommodation and food services activities" have seen strong rises https://t.co/VNe9CLYtqj pic.twitter.com/GFZUUXih2o

8.05am BST

Today's employment report also shows that wages surged in the last quarter, but the underlying picture is rather less rosy.

Average total pay (including bonuses) jumped by 7.3% per year in the three months to May, while regular pay was up 6.6% - the highest levels in at least 20 years, as this chart shows.

The analogy I like to use is height. If the shortest person in a room leaves, the average height of those remaining will rise. No-one has got taller, but the composition of the people in the room has changed, pushing up average height. In terms of average earnings, if someone paid less than the average (540 a week) loses their job, other things equal, the average earnings will increase.

In spring-summer 2020, many workers were on furlough or had their hours reduced. This meant that people saw their earnings fall, pushing down weekly wages. This year, with fewer people on furlough and hours returning closer to normal, weekly wages are higher.

What is going on with @ONS average earnings at the moment? It's complex (but interesting!), and we have set out the different issues in this blog. https://t.co/eNkULKwIYL

7.45am BST

Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.

The number of UK workers on company payrolls has jumped, as the relaxation of lockdown rules saw firms take on more staff.

Three of the sectors that have had the greatest decreases have all continued to see substantial monthly increases in payrolled employees, according to flash estimates; between May and June 2021, accommodation and food services increased by 94,000 employees, wholesale and retail by 29,000, and arts and entertainment by 24,000.

981.4 million hours were worked each week in March to May 2021.

This is up 23.3 million hours on the previous three months, reflecting the relaxation of #coronavirus restrictions, but still below pre-pandemic levels https://t.co/3b6mpDlt8a pic.twitter.com/F5rh1GTOkW

Headline indicators for the UK labour market for March to May 2021 show

employment was 74.8%
unemployment was 4.8%
economic inactivity was 21.3%

https://t.co/mhTY8epkvL pic.twitter.com/yFMdXsv4A8

Commenting on today's labour market data, ONS Director of Economic Statistics Darren Morgan said: (1/4) pic.twitter.com/3fq4s3Pyv9

Continuing, Darren said: pic.twitter.com/Oj1BgpX5nr

Darren added: (3/4) pic.twitter.com/TNw29uQwON

Darren concluded: (4/4) pic.twitter.com/tmgytRK7hq

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