UK unemployment figures see biggest hike since 2009 as 730,000 jobs cut since start of coronavirus pandemic

The grim jobs news came on the eve of confirmation that the UK is in the throes of its first official recession
REUTERS

Almost three quarters of a million jobs have been lost in the British economy since the start of the coronavirus lockdown, official figures reveal today.

They show that 730,289 fewer people were receiving a wage from an employer in July than in March — when Boris Johnson issued the “stay at home” order.

The grim jobs news came on the eve of confirmation that the UK is in the throes of its first official recession — two consecutive quarters of economic contraction — since the financial crisis just over a decade ago.

It also follows a slew of redundancy programmes announced by household names such as WH Smith and British Airways.

The fall in employment during the April to June quarter was the steepest since the last recession in 2009 but the official headline rate of unemployment stayed at 3.9 per cent, surprising economists who had predicted a sharp rise.

However, today’s data from the Office for National Statistics show a huge surge in people “signing on” for out-of-work benefits, such as Jobseeker’s Allowance, which is seen as a more up-to-date measure of joblessness.

The total has more than doubled to 2.7 million since March and is rising at a faster pace than in the wake of the banking crash, according to the ONS.

London, which is heavily dependent on the badly hit hospitality sector, has been one of the worst-hit regions with the number of claimants in the capital soaring to 469,700, the highest tally since records began in May 1974.

There was bad news even for those in work with average earnings, excluding bonuses, falling 0.2 per cent in cash terms, the first such drop since detailed records began in 2001. Economists warned that the scale of the job losses up to the summer, though severe, represented a “lull before the storm” ahead of the end of the furlough scheme by November.

Treasury figures released today showed that 1.2 million employers have put a total of 9.6 million staff on government-supported furlough leave at a cost to the taxpayer of £33.8 billion.

Chancellor Rishi Sunak said: “Today’s labour 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. I’ve always been clear that we can’t protect every job, but through our Plan for Jobs we have a clear plan to protect, support and create jobs to ensure that nobody is left without hope.”

There were growing calls today for the furlough scheme to be extended for some struggling sectors into the winter to prevent a huge wave of redundancies in the run up to Christmas.

Shadow Treasury minister Pat McFadden tweeted: “This is the moment of danger. That’s why government must step up to protect jobs in key sectors rather than withdraw employment support at same pace all over the country.”

TUC general secretary Frances O’Grady said: “The alarm bells couldn’t be ringing any louder. Ministers must act now to protect and create jobs.

“That means extending the job retention scheme for businesses with a viable future who can’t operate because of virus restrictions.

“It means investing in the jobs we need for the future in green industries, social care and across the public sector. And it means ensuring a decent safety net is in place to help those who lose their jobs get back on their feet.”

The ONS is set to confirm tomorrow morning that GDP plummeted by about 20 per cent in the second quarter of the year following a 1.8 per cent fall in the first three months.

Ruth Gregory, senior UK economist at forecasters Capital Economics said: “The cracks evident in the latest batch of labour market data are likely to soon turn into a chasm, with the unemployment rate rising from 3.9 per cent to around seven per cent by mid-2021.”

Ulas Akincilar, head of trading at the online trading platform INFINOX, said: “The grim truth is that many of the millions of people still stuck in the furlough scheme’s strange limbo between work and unemployment no longer have jobs to go back to.

“As the Government progressively withdraws the safety net, the fate of millions of workers still hangs in the balance. The danger is that they will both lose their jobs and then go onto to be a brake on wider economic growth.

“Meanwhile those still in employment are seeing their pay squeezed. With some employers asking staff to take a pay cut and the few who are recruiting having no need to offer big salaries to attract candidates, average pay packets are shrinking.”

Heathrow airport said today the number of passengers it handled in July was down 89 per cent on last year, only a slight rise from June despite the lifting of quarantine for travellers from some holiday destinations during the month.

There was a glimmer of hope from the high street, with retail sales rising for the second month running in July. Total retail sales were up 3.2 per cent and like-for-like sales by 4.3 per cent.

Create a FREE account to continue reading

eros

Registration is a free and easy way to support our journalism.

Join our community where you can: comment on stories; sign up to newsletters; enter competitions and access content on our app.

Your email address

Must be at least 6 characters, include an upper and lower case character and a number

You must be at least 18 years old to create an account

* Required fields

Already have an account? SIGN IN

By clicking Create Account you confirm that your data has been entered correctly and you have read and agree to our Terms of use , Cookie policy and Privacy policy .

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.

Thank you for registering

Please refresh the page or navigate to another page on the site to be automatically logged in