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UK Unemployment Figures Rose in August

The UK’s latest unemployment statistics revealed that the number of people out of work grew during the last quarter. In fact, the increase in the number of unemployed was higher than had been seen for four years and more than had been anticipated. What are the different factors behind this?

The Overall Numbers

Unemployment rose by 22,000 in the three months leading up to August. This brought the country’s total up to 1.31 million.

These figures were released by the Office for National Statistics (ONS). It was an unexpected blow to the economy, as such a big drop hadn’t been expected. In July, the nation’s unemployment numbers had fallen to their lowest point in over 40 years.

There was also a drop in the number of people who are in work, which was calculated as 56,000. This gives a new total of 32.69 million people working in the UK. Such a large drop in the number of employed workers hadn’t been seen since mid-2015.

What Are the Reasons for This?

The main factor behind these surprising unemployment figures was a decrease in the number of young people in work. Before these figures were released, analysts had expected employment numbers to rise by 26,000 and the unemployment rate to stay at 3.8%. Instead, it rose to 3.9%.

Matt Hughes is the deputy head of labour market statistics at the ONS. He was quoted as saying that the employment rate growth “has cooled noticeably in recent months”. He also pointed out the rate for those under 25 had started to fall on the year.

All of the other age groups saw the number of people in employment rise during this period. Pay growth is also still outstripping inflation, which has now been the case for done for the last 18 months or so. Wage growth slowed down slightly, though, by coming down unexpectedly from 4% to 3.8%.

Two of the possible reasons stated are the end of seasonal contracts and the number of young people leaving full-time education in this period. Some British businesses are also concerned about Brexit and economic stagnation elsewhere, leading to a focus on international debt collection agency activities.

The Jobs Market Shrunk Too

The UK’s job market also completed eight consecutive months of falling vacancy rates. This was due to the number of jobs advertised on the market falling by 11,000, to 813,000. This the lowest that this number has sunk to since the end of 2017.

On the bright side, the fall in the number of vacancies was less pronounced than it had been the month before. The drop has been in the region of 23,000 in the previous month’s figures.

It was also reported that the number of citizens who are classed as “economically inactive” grew in the last quarter. This figure rose by 57,000, leaving a new total of 8.68 million.

With Brexit due to take place at the end of October, there will be a lot of interest in how this affects the UK’s next set of unemployment figures.