UK: Unemployment rate rises to 4.9% in three months to end of October

UK: Unemployment rate rises to 4.9% in three months to end of October

The unemployment rate continued to climb in the United Kingdom in the three months to the end of October in the wake of the new coronavirus pandemic, to 4.9% against 4.8% for the three months to the end of September.

That’s 1.2 percentage points higher than a year earlier, when Britain’s unemployment rate was near its lowest in more than 40 years.

Despite the government’s short-time work compensation system, which has kept employment on a drip in the country since the start of the pandemic, layoffs reached a record 370,000 in the three months to October, the agency said. National Statistics Office (ONS) in its monthly labor market report released on Tuesday.

Early figures for November signal that the number of salaried employees fell 2.7% year-on-year. Since February, before the full shock of the pandemic, the United Kingdom had 819,000 fewer employees, according to these data.

2.7 million precarious people helped

At the same time, the number of people benefiting from universal credit, a government compensation for low-income, unemployed and disabled people, which serves as a measure of precariousness in the country, reached 2.7 million people in November.

The increase in unemployment “suggests that the gradual withdrawal of the partial unemployment compensation mechanism”, which was originally due to end in October, “has continued to weigh on employment”, notes Ruth Gregory, economist at Capital Economics.

The second wave of coronavirus in the country and the containment measures in the various regions of the country, particularly in England during the month of November, led the government to backtrack and extend this compensation system until March.

The public authorities will therefore continue for five months to cover up to 80% and up to 2,500 pounds monthly the salaries of employees of companies forced to close because of health measures to combat the pandemic.

Ms Gregory, however, sees an upturn on the horizon for the labor market: “with the deployment of vaccines which should boost demand in 2021, we now believe that the unemployment rate will climb to 7% and not 9% as previously estimated, and should be down to 4% by 2023”.