United Kingdom employment in Q2 sees largest quarterly drop in decade

Employment

Data released by the Office for National Statistics (ONS) showed a leap of 81,000 last month alone despite continuing support for employers via government loan vehicles and the Job Retention Scheme for furloughed workers.

Official figures released Tuesday showed that the number of people working fell in the April-June quarter by the most since the global financial crisis more than a decade go, even as the unemployment rate held steady at a historically low 3.9% in June.

The unemployment rate remained at 3.9%, the ONS added.

Tom Pickersgill, co-founder & CEO of Orka Technology Group, said, "Today's unemployment figures won't shock anyone, however, I believe that the recovery will be quicker than many expect".

"Figures from our main survey show there has been a rise in people without a job and not looking for one, though wanting to work", he said.

Meanwhile, the number of hours worked by British employees has dropped to record lows.

Total employment is down by 220,000 in the three months to June - better than expected.

The number of people claiming universal credit - a benefit for the unemployed and those on low pay - rose to just under 2.7 million in July - a 117% leap from March.

The number of self-employed people fell by a record amount in the three months to June, led by older workers, while the number of employees rose - something the ONS said was partly accounted for by workers reclassifying themselves as employed.

"Vacancies numbers began to recover in July, especially in small businesses and sectors such as hospitality, but demand for workers remains depressed", he said. Indeed this month, August, may ultimately prove to be the worst in terms of the increase in job losses, but it will take some time for that to appear in the official statistics. Many people were taken off payrolls as large parts of the economy ground to a halt in late March when Prime Minister Boris Johnson told everyone to only leave their homes to exercise or get food.

The Office for National Statistics on Tuesday also reported that the number of people on payroll in the United Kingdom fell by a further 81,000 in July to 28.27 million. Most of that was weighted towards the early days of lockdown.

But economists say the full effect on employment will not be felt until the scheme ends in October.

These furloughed workers are still considered to be employed, but many worry they will have no job to come back to when the scheme winds down.

The stable jobless rate is largely due to a government salary support scheme that will end in October, a cliff-edge moment that many economists think will lead to an nearly immediate doubling in unemployment.

The impact of the coronavirus pandemic has begun to hit the job market in the Anglia region with a rise in unemployment.

Under the Coronavirus Job Retention Scheme, the government has been paying a large chunk of the salaries of workers retained rather than fired.

"However, with firms continuing to face a flawless storm of increased costs, reduced demand, and diminished cash reserves, unemployment is likely to surge as the Government support schemes wind down, unless action is taken".

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