Skip to content

UK Unemployment Rate Rose Before Pandemic Struck

The latest figures from the Office for National Statistics (ONS) show that job vacancies were down and unemployment up even before the coronavirus outbreak.

What Are the Numbers?

It is certain that the country’s unemployment numbers go through the roof for the month of March and beyond. However, the ONS research reveals that 22,000 more people lost their jobs in the three months to February. This brought it up to a total of 1.36 million.

Overall, the number of people in employment rose very slightly, with a 4% increase in February improving on January’s 3.9% rise. In fact, employment levels in the UK were at a record high before the lockdown was imposed, with 76.6% of people in work.

Analysts had been worried about March’s numbers showing a rise of close to 200,000 people out of work, but the true figures are just under 20,000.

The ONS also pointed out that there was a drop in job vacancies in the first quarter of 2020. Vacancies fell by 52,000 on a year by year basis, giving a figure of 795,000 for the first three months of 2020. This is as low as it has been since the end of 2017. Wage growth also fell in the three months to February, dropping from 3.1% to 2.8%.

A Look Ahead

Economists have already warned that the modest increase in unemployment seen in the early figures for March are likely to give way to far worse numbers. It has been suggested that over a third of all British jobs will be affected.

This would mean that 13 million jobs are affected, which could lead to an unemployment rate of close to 9% in the near future. As a result, household income across the country would plummet by 10%. Many companies are also turning to international debt recovery to ease their situation.

The March unemployment numbers reflect the average number of paid workers in the month. Therefore, the numbers for this month are skewed by the fact that the first fortnight was business as usual, before the lockdown measures came into place.

Employment minister Mims Davies pointed out that the current employment data for the UK was already out of date before being published. However, she pointed out that the strong employment rate before the crisis confirmed the robust underpinning of the national economy.

The recent opening of the government’s furlough scheme could also mask the true extent of the employment situation for some time. At the time of writing, it has already been used to guarantee that 1 million British workers will continue to receive wages.

Once the Job Retention Scheme comes to an end, we could see unemployment numbers on the rise. It is feared that the impact will be initially far more severe than in previous periods of recession.

Yet, it is also hoped that the recovery will be swifter than we have witnessed in the past. This could lead to unemployment numbers recovering sharply by the end of the year if firms can get back to business before then.