Skip to content

A Look at the UK Jobs Market as Furlough Comes to and End

With the UK’s furlough scheme coming to an end this weekend, a look at the UK jobs market reveals the damage that has been done to it due to the coronavirus pandemic and the lockdown.

The Unemployment Rate Has Grown

The furlough scheme has largely done its job of protecting workers during this period, but the figures show that the unemployment rate has risen during the crisis, to a total of 4.5% by August. This compares to 3.8% before the pandemic struck, which was the lowest it had been in four decades.

Data from HM Revenue and Customs suggests that 750,000 of the UK’s workers are no longer on their employer’s payrolls. This points to them having already lost their job before the furlough scheme comes to an end.

As August drew to a close, some 3.3 million workers were still on furlough, far less than the 9 million that relied on it when the scheme was at its highest point. With many businesses still relying on international debt collection processes to survive, the switch to the new Job Support Scheme is expected to lead to further job losses.

Some of the Key Figures

One of the worst affected parts of the UK is London. The capital saw a 3.5% increase in unemployment from September 2019 through to the same month this year. At the other end of the scale, Northern Ireland only saw a 0.4% drop.

In terms of sectors, the arts and entertainment industry was worst-affected, as 30% of the employees in these jobs were still on furlough in October. Hotels and restaurants were next on the list of the most affected sectors.

Another statistic shows that employees with black, Asian and minority ethnic backgrounds were most likely to be made unemployed after being furloughed. This data came from the Resolution Foundation think-tank, who discovered that 22% of BAME workers lost their jobs, compared to 9% overall.

Another group that has been disproportionately affected by the crisis are young workers. In this case, the London School of Economics found that people between the ages of 16 and 25 were twice as likely to lose their jobs than older employees. Over 11% of workers in this age group were made jobless, compared to 4.6% among those aged over 26.

The US Economy Shows Signs of Bouncing Back

While the British economy continues to suffer, the signs across the Atlantic are more positive. The slump that was previously seen there appears to have been reversed, with the Bureau of Economic Analysis pointing to an annualised rise of 33.1% in GDP from July to September.

This was an impressive increase from the 7.4% noted in the last quarter, and a massive jump from the previous record of 3.9% that was recorded in 1950. However, analysts suggest that there are still tough times ahead as the country attempts to get back to pre-lockdown levels of activity and deal with the huge growth in jobless levels.