Covid-19: Unemployment rate increases as pandemic takes toll in Britain

The Office for National Statistics has said that Britain’s unemployment rate rose to 4.1% in the three months to July as the total number of jobless rose by 62,000.

The jobless rate was up from 3.9% a month earlier – but is still yet to be fully illustrative of the economic crisis with the Treasury’s soon-to-end furlough scheme helping keep the numbers down.

Meanwhile, payroll data showed that 695,000 fewer people were employed in August compared to March when the UK lockdown started – though after revisions to earlier data that was a smaller number than before.

Darren Morgan, director of ecnomic statistics at the ONS, said: “Some effects of the pandemic on the labour market were beginning to unwind in July as parts of the economy reopened.”

The number of people described as “temporarily away from work” – including those on furlough – fell in July though was still more than five million while other measures including average hours worker and job vacancies also improved.

“Nonetheless, with the number of employees on the payroll down again in August and both unemployment and redundancies sharply up in July, it is clear that coronavirus is still having a big impact on the world of work,” Mr Morgan added.

The total number of unemployed for the three months to July was just above 1.4 million

The number of people claiming unemployment-related benefits – which may include those with low hours or low pay – reached 2.7 million, up 121% since March.

The figures also showed a stark contrast between the impact of the jobs crisis on different age groups.

The number of people in employment was 12,000 fewer in July than three months earlier.

But for those aged 16 to 24 years there was a fall of 156,000 – including a record decrease of 146,000 for those aged 18 to 24 – while jobs for those aged 65 and over fell by 92,000.

In contrast, there was an increase of 236,000 jobs for those aged 25 to 64 years, including a record increase of 67,000 for women in the 25 to 34 years age group.

Chancellor Rishi Sunak said: “This is a difficult time for many as the pandemic continues to have a profound impact on people’s jobs and livelihoods.

“That’s why protecting jobs and helping people back into work continues to be my number one priority.”

Mr Sunak pointed to the government’s job retention bonus, worth up to £9bn, which will reward employers who take back workers temporarily laid-off under the government-backed furlough scheme.

But a number of MPs and business groups want the Treasury to consider extending the furlough scheme in some form, fearing that if taxpayer subsidies for those jobs ends completely as planned next month there will be a surge in unemployment.

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