Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.
The UK’s unemployment rate has fallen again as more people returned to work as pandemic restrictions were eased.
New figures released by the Office for National Statistics this morning show that 197,000 people joined company payrolls in May, the sixth monthly increase in a row.
That follows the reopening of non-essential shops, leisure and hospitality venues in April, and the resumption of indoor services in pubs and restaurants in May.
The latest figures “suggest that the jobs market is showing signs of recovery”, the ONS says — although there are still more than half a million fewer people on payrolls than before the pandemic.
The number of payrolled employees has increased for the sixth consecutive month, up by 197,000 in May 2021 to 28.5 million.
It is however 553,000 below levels seen before the coronavirus (COVID-19) pandemic. Since February 2020, the largest falls in payrolled employment have been in the accommodation and food services sector, people aged under 25 years, and people living in London.
Today’s jobs report also shows that the unemployment rate dropped to 4.7% in the three months to April, down from 4.8% a month ago.
The ONS also reports that pay growth continued to rise, with total pay (including bonuses) and regular pay (excluding bonuses) rising by 5.6% per year in the three months February to April 2021.
But it cautions that this is driven by “compositional effects” – due to a fall in the number and proportion of lower-paid employee jobs, and also because the latest month is now compared with April 2020 when earnings were first affected by the pandemic.
But the delay to the final easing of Covid-19 restrictions in England was announced yesterday could lead to job losses, businesses fear, unless the government provides more support.
The UK’s largest trade bodies joined hospitality businesses and trade unions in urging the government to change its mind and come up with new support measures, warning that businesses will be driven to the wall otherwise.
Tony Danker, the director general of Britain’s most powerful business lobby group, the CBI, said the government “must urgently revisit the support available”, including the tapering of business rates relief and a moratorium on landlords’ right to collect commercial rent.
Both are due to end on 1 July, signalling looming extra costs for debt-laden hospitality venues that will still be subject to restrictions on how many people they can serve.
Also coming up today
It could be a busy day for trade news, with ‘broad terms’ of a trade deal between the UK and Australia to be announced this morning.
My colleague Harry Taylor reports:
A Department for International Trade spokesperson confirmed that the broad terms had been struck on Monday night, after Boris Johnson and the Australian prime minister, Scott Morrison, had dinner at Downing Street.
Farmers have previously raised concerns about the potential of a zero-tariff and zero-quota trade deal with Australia which could undercut them by cheap imports, affecting the viability of their business.
Other fears include that any agreement could introduce cheaper meat with lower welfare standards into the UK market, hitting British farmers who have operated along higher standards.
There are also reports that the EU and US are on the brink of resolving their 17-year dispute over aircraft subsidies.
A breakthrough in the long-running Airbus-Boeing row could lift the threat of billions of dollars in punitive tariffs,
Diplomats and officials confirmed on Monday night that two days of intensive negotiations in Brussels had left the EU and the Biden administration on the cusp of confirming a deal on subsidy rules for Airbus and Boeing.
The breakthrough is set to be finalised on Tuesday at US president Joe Biden’s first EU-US summit meeting in Brussels. People close to the talks said that the governments of Airbus’s three home countries in the EU — Germany, France, and Spain — were being consulted on an agreement that could be confirmed on Tuesday morning if there were no last-minute obstacles.
The FTSE 100 is set to open higher, despite the delay to ending the lockdown in England. Yesterday it closed at its highest level since late February 2020, early in the pandemic.
- 7am BST: UK unemployment report
- 10am BST: Eurozone trade balance for April
- 1.15pm BST: Bank of England governor Andrew Bailey speaks at The CityUK Annual Conference, on the future growth of UK-based financial and related professional services
- 1.30pm BST: US retail sales and producer prices index for May
- 2.15pm BST: US industrial production for May
- 3pm BST: US NAHB Housing Market Index for June