Pace of decline in coronavirus-hit UK jobs market slows in June

Figures by Office for National Statistics do not include recent slew of job losses caused by the pandemic.

A woman wearing a protective face covering walks past a sale sign in a shop window following the outbreak of the coronavirus disease (COVID-19), in Manchester, Britain
The UK government last week announced a series of measures to stem an expected surge in unemployment [Phil Noble/Reuters]

The pace of decline in the United Kingdom’s labour market slowed in June, official data have showed, although the figures did not include a recent slew of job losses caused by the coronavirus’s hit to the economy.

Early indicators suggested the number of employees on companies’ payrolls was down by 649,000 between March and June, with the largest falls at the start of the pandemic, the Office for National Statistics (ONS) said on Thursday.

The UK government closed non-essential shops and other businesses to the public on March 23, shortly after ordering the closure of bars, restaurants and cinemas.

The unemployment rate in the UK unexpectedly held at 3.9 percent in the three months to May. A Reuters news agency poll of economists pointed to a rise in the unemployment rate to 4.2 percent.

An ONS official said the unemployment rate had been held down by about half a million people who were away from work because of the pandemic and receiving no pay, but who said they believed they still had a job.

Even so, the number of people in employment in the three months to May fell by the most since 2011, down 126,000, driven mostly by self-employed people, according to the ONS.

“Job losses unfortunately appear to be rising, and recent data on the government’s furlough scheme suggests that these redundancies are likely to be heavily concentrated among lower-paid workers,” said James Smith, a developed markets economist at ING.

“Rising unemployment is the main argument against a ‘V-shape’ economic recovery,” Smith added.

There was another sign of the weakness in the labour market in the number of vacancies which fell in the three months to June to the lowest level since the data series began in 2001 at 333,000, 23 percent lower than the previous record low in 2009.

Rishi Sunak, British finance minister, last week announced the latest round of measures worth 30 billion pounds ($37bn) to stem an expected surge in unemployment, including the payment of bonuses to companies which take back furloughed workers.

But since then, a string of companies have announced layoff plans ranging from private security company G4S to retailers Boots and John Lewis.

Source: Al Jazeera, News Agencies