Business

UK employment drops by the biggest amount in a decade – 220,000 on the quarter

UK employment drops by the biggest amount in a decade

UK employment drops by the biggest amount in a decade

The UK has seen the biggest employment dip in over a decade between April and June, official figures show. 

Employment fell by 220,000 on the quarter, said the Office for National Statistics.

This was the largest quarterly decrease since May to July 2009, the depths of the financial crisis. 

The youngest workers, oldest workers and workers in manual or elementary occupations were most likely to be affected by the pandemic, it said. 

Jonathan Athow, deputy national statistician at the ONS, said: “The groups of people most affected are younger workers, 24 and under, or older workers and those in more routine or less skilled jobs. 

“This is concerning, as it’s harder for these groups to find a new job or get into a job as easily as other workers.” 

Mass job cuts being planned

The UK economy has been battered by the pandemic, but unemployment has not surged as much as feared because large numbers of firms have put their employees on the government-backed furlough scheme. 

However, there are fears this will change when the furlough scheme ends in October. 

Scores of businesses across the UK are already planning job cuts – with 140,000 announced in June. 

According to the ONS, the number of average hours worked continued to fall in April-June reaching record lows both on the year and the quarter. 

The UK unemployment rate was estimated at 3.9% – largely unchanged on the year and the previous quarter. 

But there were pay falls for those still working, with regular pay levels down 0.2% compared with a year earlier – the first negative pay growth since 2001. 

The number of people on zero-hours contracts increased to more than 1 million. 

UK employment drops by the biggest amount in a decade, ONS stats

ONS statistics

“Early indications for July 2020 suggests that the number of employees in the UK on payroll is down around 730,000 compared with March 2020,” said the ONS. 

It added that a large number of people are estimated to be temporarily away from work – including those furloughed – approximately 7.5 million in June 2020, with more than three million of these being away for three months or more. 

There were also around 300,000 people away from work because of the pandemic who were receiving no pay in June 2o2o. 

 Jeremy Thomson-Cook, chief economist at Equals Money, said the figures showed the true level of those out of work had been “very effectively lowered by the government’s furlough scheme” and that the worst lay ahead. 

“Unfortunately, the end of the furlough scheme will present a cliff-edge, statistically and economically, for those currently relying on government support to make up their wages.

“Longer-term government stimulus to create jobs is needed to ensure the gap  between the end of the furlough scheme and a rise in employment is not larger than it needs to be.” 

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