United Kingdom suffers heavy job losses amid pandemic

UK suffers heavy job losses amid pandemic

The figures also showed that a further 81,000 people fell off company payrolls last month, giving a total of 730,000 since March, when the coronavirus lockdown began.

The UK has kept a lid on the unemployment rate so far during the coronavirus pandemic but, scratch beneath the surface, and there are worrying trends that will likely see the jobless total soaring by the end of the year.

"The number of hours worked saw a record drop in the second quarter from April to June, but in July it was down by only 3%, less than half the fall in May and June".

Analysts have warned that unemployment will continue to surge when the government's job retention scheme, which pays 80 percent of workers' salary up to 2,500 pounds (3,268 US dollars) a month to those furloughed, winds up in October.

"The fact that reduced hiring rather than increased firing of permanent staff is the main cause of the jobs slowdown to date bodes ill for the coming months if more employers turn to redundancies as a last resort".

Chancellor of the Exchequer Rishi Sunak said of the report: "Today's labor market stats make it clear that our unprecedented support measures, including the furlough and self-employed support schemes, are working to safeguard millions of jobs and livelihoods that could otherwise have been lost".

But that reflected more people who had given up looking for work and therefore were not considered unemployed, and 300,000 people who said they were working but getting no pay, the Office for National Statistics (ONS) said.

The unemployment rate unexpectedly held at 3.9%.

The Bank of England last week warned that the rate would soar to around 7.5% by the end of the year following the closure of a United Kingdom government furlough scheme to subsidise workers' wages.

Economists at consultancy Capital Economics predict the unemployment rate will reach its peak at around 7% by mid-2021.

Jonathan Athow, the ONS' deputy national statistician for economic statistics, said: "The falls in employment are greatest among the youngest and oldest workers, along with those in lower-skilled jobs".

The ONS is expected to announce on Wednesday that Britain's economy has fallen into a recession with a 21-percent slump in the size of the economy in the second quarter.

Self-employed workers took a major hit as their numbers fell by a record amount, while the amount of employees rose.

The number of people claiming universal credit - a benefit for those on low pay as well as the unemployed - rose to 2.689 million in July, leaping by 117% from March.

"The increase was driven by small businesses (less than 50 employees), some of which reported taking on staff to meet coronavirus (COVID-19) guidelines", the ONS said.



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