LONDON (UK) – Britain’s unemployment rate struck its highest in nearly five years in the last three months to November, when coronavirus cases began to increase for a second time. In addition to it, most of the country retreated to a partial lockdown.
According to official data, redundancies touched a record high, taking the unemployment rate to 5.0%, its highest since mid-2016. However, the increase was slightly weaker than forecasts by economists’.
There were some signs of a limited recovery in December, when lockdown measures were relaxed. That said, a deterioration is likely to happen in early 2021 as a tougher lockdown closed down schools and closed most non-essential businesses.
Tax data for December showed a 52,000 increase in the number of staff on company payrolls from November, but there were 828,000 fewer workers on payrolls than in February.
Unemployment has been brought down by the government’s Job Retention Scheme, which lend support to 2.4 million jobs as of October 31, down from a peak of 8.9 million in May.
The programme is Britain’s most expensive COVID-19 economic support measure, which amounts to 46.4 billion pounds ($63 billion) up to mid-December, and is likely to end on April 30.
“This crisis has gone on far longer than any of us hoped – and every job lost as a result is a tragedy,” finance minister Sunak said after Tuesday’s data. “We’re throwing everything we’ve got at supporting businesses, individuals and families.”
Tej Parikh, chief economist at the Institute of Directors, call for an extension of support for jobs by Sunak in his March 3 budget.
Parikh said, “The latest lockdown will have only added further pressure on firms with troubled balance sheets, which means more jobs are likely to be lost in the coming months.”
The number of people in employment came down to 88,000 in the three months to the end of November, the smallest fall since the pandemic began and less than the 100,000 drop forecast by economists in a poll.
The data showed growth in wages rose by an annual 3.6%, the biggest increase in more than a year.
But the ONS said the increase largely indicated how the job cuts and lost pay had taken a toll on workers in lower-paid sectors and on part-time workers. Underlying pay growth was less than 2%, it said.