Unemployment rate drops 50,000 for first time since pandemic began

BRITAIN’S unemployment rate has seen a sustained fall for the first time since the start of the pandemic, raising hopes that the worst of the jobs market fallout from Covid-19 could be over.

The number of people looking for work dropped an estimated 50,000 to 1.67 million in the three months to February compared with the previous quarter, according to figures from the Office for National Statistics.

The surprise dip brings the jobless rate down from five per cent to 4.9 per cent, the first quarter on quarter drop since the last three months of 2019.

However, in London, where the rise in joblessness has been by far the most severe during the pandemic, the peak has not yet passed. The ONS data showed a further 11,000 people were looking for work in the capital, lifting the total to 366,000 and the rate to 7.2 per cent.

The number of job vacancies in the January to March quarter fell by 23 per cent on the year with industries including arts, entertainment and recreation, and hospitality the worst affected.

There were also warnings that today’s encouraging figures could represent the calm before an unemployment storm triggered by the end of furlough, which is still protecting five million jobs.

Danni Hewson, of brokers AJ Bell, said: “Whilst the hope is the majority of those [furloughed] will be reintegrated back into the workforce, hope doesn’t pay the bills. Until the temporary ends, the reality can only be weighed and considered.”

But Thomas Pugh, of City forecasters Capital Economics, said: “We still expect the unemployment rate to rise to a peak of six per cent by early 2022, but that would be a much better result than most feared only a few months ago.”