Weakening labour market ‘cause for concern’ despite vaccine hope
UK ECONOMY HIT BY COVID-RELATED JOB LOSSES AND BREXIT UNCERTAINTY
BRITAIN’S jobless rate rose again in the three months to October and redundancies reached a record high as companies were hit by new coronavirus restrictions and prepared for the end of government job subsidies that were eventually extended into 2021.
Official data showed the unemployment rate reached 4.9 per cent, up from 4.8 per cent in the three months to September, its highest in more than four years. However, the increase was smaller than expected by most economists.
The number of redundancies reached a record high of 370,000 in the August-toOctober period, although it decreased in October alone, the Office for National Statistics (ONS) said.
“Overall, we have seen a continuation of recent trends, with a further weakening in the labour market,” said Darren Morgan, ONS director of economic statistics.
For much of the period covered by Tuesday’s (15) data, chancellor Rishi Sunak had rejected calls to extend his broad job-retention scheme beyond a scheduled October 31 expiry, raising fears of an acceleration in job losses.
But, as a second wave Covid-19 cases hit, Sunak was forced to extend scheme until the end of March 2021.
“The ... extension of furloughing will provide a lifeline for many jobs over the difficult winter months, but the big question is what happens after,” said Tej Parikh, chief economist at the Institute of Directors.
The introduction of vaccines offered some hope, but hiring plans remained stuck in neutral, he said. He called for new measures to help job creation, such as a social security contributions cut.
The Bank of England has forecast that the unemployment rate is likely to peak at nearly eight per cent in the second quarter of 2021.
The Arcadia fashion group fell into administration late in November, putting more than 13,000 jobs at risk, and retail chain Debenhams is closing all its shops, jeopardising a further 12,000 jobs.
As well as Covid-19, Britain’s economy faces the risk of a shock from the end of its post-Brexit transition period on December 31. London and Brussels remain locked in negotiations little more than two weeks before the possible in
the
troduction of tariffs and other barriers to trade with the European Union. Tax office data showed the number of staff on company payrolls slipped by a monthly 28,000 in November, taking the total number of job losses since February, according to the
payrolls measure, to them in hospitality.
Job vacancies rose to 547,000 in the three months to November, about 60 per cent higher than during the depths of the pandemic slump but down by about a third from a year earlier.
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