October 31, 2020

UK employment sees largest quarterly fall in a decade

A woman wearing a protective face mask crosses the road in front of the Bank of England in what would normally be the morning rush hour in the City of London on March 17th, 2020. The financial district of the UK is unusually quiet after the government requested people to refrain from all but essential travel and activities yesterday.

Jonathan Perugia

Employment in the U.K. has seen its largest quarterly fall in over a decade, according to official data published Tuesday.

The Office for National Statistics said estimates show 32.92 million people were in employment between April and June, 113,000 more than a year before, but 220,000 fewer than the previous quarter.

This decrease in employment, which affected both men and women, was the largest quarterly fall since May to July 2009.

Data for July showed that the number of employees on payrolls fell by 730,000 compared with March, the ONS said.

“Survey data show employment is weakening and unemployment is largely unchanged because of increases in economic inactivity, with people out of work but not currently looking for work,” it added.

The headline unemployment rate for April to June was 3.9%, covering the U.K.’s lockdown period that began in late March. However the data is unlikely to show the true extent of job losses caused by the coronavirus because of the U.K. government’s “furlough” scheme, which saw it subsidize the wages of workers in a bid to stop employers making job cuts.

Under the furlough program, the government has paid up to 80% of workers’ monthly wages up to £2,500 ($3,272), but it has said companies have to share more of the costs of the scheme from August.

Responding to the data, U.K. Finance Minister Rishi Sunak said the government was unable to save all jobs affected by the coronavirus crisis.

“I’ve always been clear that we can’t protect every job, but … we have a clear plan to protect, support and create jobs to ensure that nobody is left without hope,” he said.

The latest data shows the number of people claiming unemployment benefits reached 2.7 million in July 2020, an increase of 116.8% since March.

“A large number of people are estimated to be temporarily away from work, including furloughed workers; approximately 7.5 million in June 2020 with over 3 million of these being away for three months or more,” the ONS said.

“New analysis shows that the youngest workers, oldest workers and those in manual or elementary occupations were those most likely to be temporarily away from paid work during the coronavirus (COVID-19) pandemic.”

The CBI, a British business lobby group, said the data “shows the devastating mark left on the labour market by the coronavirus crisis.’

“With the U.K. under stringent lockdown measures to contain the virus in the quarter to June, fall in jobs and hours worked is to be expected,” Matthew Percival, CBI Director for People and Skills, said.

“More positively, there is a small rise in vacancies, particularly in the hospitality sector as restrictions were relaxed,” he added.

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