Skip to content

UK Employment Falls Sharply but Vaccine Hopes Boost Markets

The hopes that a coronavirus vaccine will be available by the end of 2020 has led to the financial markets receiving a boost that led to rising share prices. Yet, the latest employment news is less promising, with a dramatic fall in the number of people in work.

The Employment Details

This information comes from the Office for National Statistics (ONS), who report that the number of people in employment dropped by 247,000 in the period from July to September when compared to the same months last year.

There are now 32.51 million people working in the country. This latest drop in the employment numbers represents the biggest decrease in employment in the UK since the first quarter of 2010.

The ONS pointed out that the biggest drops were seen in part-time and self-employment. In terms of part-time workers, this figure sunk by 158,000, to 8.11 million. The self-employed statistics show a decrease of 174,000, including a drop of 99,000 women, to a new total of 4.53 million.

On the other hand, the number of female workers in full-time employment rose by a record amount, as part of an overall increase of 113,000, to 21.17 million. This was largely due to the record total of 165,000 new women in full-time employment in the quarter, although the number of men fell by 53,000 in the same period.

It is yet to be seen how much impact the extension to the government’s furlough scheme will have on the country’s employment situation, as the recent rise appears to be linked to the original winding down of this programme. Chancellor Rishi Sunak pointed out these new numbers “underline the scale” of the problem that the nation’s employers face due to the pandemic.

While he has recently said that the furlough scheme will continue until March of next year, it is feared that the announcement of this extension came too late for some companies that had already laid off staff before the change was made. The rising number of firms using a collection agency to recover debts confirms the urgency with which help is needed.

It is worth noting that the current unemployment rate of 4.8% in the UK is still below the levels seen after the last financial crisis hit. Indeed, it reached over 8% in 2011. This number is also below the Eurozone unemployment level of 8.3%.

A Look Ahead

As the furlough scheme winds down again next year, it is thought that the number of jobless will increase sharply again unless the vaccine can be rolled out in time to allow more industries to return to normal in the meantime.

Minister for Employment Mims Davies MP stated that the government’s Plan for Jobs continues to focus on “protecting, supporting and creating jobs” for people of all ages. She pointed out that they are doubling the amount of Work Coaches in Jobcentres and have launched the £2 billion Kickstart programme, with the first new recruits recently joining up.

Initial estimates for October suggest that another 33,000 people left their jobs in this month, making the overall drop from March 782,000.