Rishi Sunak is too savvy an operator to declare victory in the battle against unemployment because the past 18 months have shown that the unexpected can happen, and often does.

Yet while noting that there could still be “bumps in the road”, the chancellor is certainly relieved by how well the UK labour market has recovered from the effects of the Covid pandemic.

The latest jobs bulletin from the Office for National Statistics showed the employment rate up and the unemployment rate down. Job vacancies hit 1m for the first time in July and the number of hours worked a week – while still below their pre-crisis levels – passed 1bn for the first time since early 2020. Without question, this was an extremely strong report.

Three big imponderables remain. The first is whether the labour market will be knocked off course by the large number of daily cases of the Delta variant of the virus being reported in recent weeks. Thus far, the boost to employment from reopening the economy after its winter lockdown has outweighed any headwinds from the “pingdemic” or consumers becoming more nervous due to fears of falling ill.

The second issue looming is whether unemployment will start rising now the furlough scheme is being phased out. Wage subsidies have been – along with the development of vaccines – one of the two main success stories of the past 18 months and the TUC says it is premature to bring them to an end next month.

Sunak thinks the furlough scheme can be phased out relatively painlessly because half the people still on the scheme are on flexi-furlough, working some hours in their old jobs.

The ONS said there was no evidence of redundancies increasing before employers having to make a contribution to the costs of the furlough in July, which supports the chancellor’s view that firms are less likely to make people redundant if they are paying a share of their wages.

Even so, the continued problems of certain sectors and the structural changes to the economy since the start of 2020 – more working from home and an increase in online shopping, for example – mean some dislocation is inevitable.

Finally, there is the question of what the Bank of England does in response to a labour market in which there appears to be little spare capacity. In the three months to June, annual growth in average earnings reached 8.8%, up from 7.4% in the three months to May and the highest since the current series began 20 years ago.

On the face of it, there is a case for immediate action from Threadneedle Street to prevent a wage-price spiral.

Appearances can be deceptive, however. Most of the annual increase in earnings was due to weak wage growth during the spring of 2020 and the fact that job losses were concentrated in low-paid sectors such as hospitality. Underlying pay growth once these factors are stripped out is running at 2%, according to Ruth Gregory, a senior economist at Capital Economics. Threadneedle Street has no need to rush into a decision: it has time to see how things pan out in the next few months.