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UK Suffers Biggest Monthly Job Losses Since 2009

August 11, 2020

job losses

The number of people in employment in the UK dropped by the biggest rate since 2009. Over the past three months, the coronavirus outbreak has taken a heavy toll on the labour market despite the government’s huge job protection scheme.

A record plunge in self-employed workers has led to there being 220,000 fewer people employed in the second quarter, according to the Office for National Statistics.

Separate tax data for July has shown that the number of staff on company payrolls has fallen by 730,000 since March, warning that there could be a much bigger rise in joblessness.

Further job losses are expected as Britain looks to end its job retention scheme to protects employees, which will close at the end of October. British finance minister Rishi Sunak said the figures showed the government’s support programmes were working but job losses were inevitable.

“I’ve always been clear that we can’t protect every job, but … we have a clear plan to protect, support, and create jobs to ensure that nobody is left without hope,” he said.

The unemployment rate unexpectedly held at 3.9% but that reflected an increase in people who had given up looking for work and who were therefore not considered to be unemployed and people who said they were in work but were getting no pay. Last week the Bank of England forecast the jobless rate would hit 7.5% by the end of this year.

The number of self-employed people fell by a record amount in the three months to June, with the largest group being the older workers. The number of employees rose over this same period, however, the ONS said was partly accounted for by workers reclassifying themselves as employed.

The number of people claiming universal credit, a benefit for the unemployed and those on low pay, rose to £2.689 million in July, an increase of 117% from March.

Pay fell by the most in more than 10 years in the April-June period, down by 1.2%. This was largely due to workers participating in the job retention scheme, receiving 80% of their pay since lockdown began. Excluding bonuses, pay fell for the first time since records began in 2001.

There was a small increase in job vacancies in the three months leading into July. “The increase was driven by small businesses (less than 50 employees), some of which reported taking on staff to meet coronavirus (COVID-19) guidelines,” the ONS said.

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