UK records biggest quarterly unemployment growth in 11 years

UK officially in a recession after 11 years

UK records biggest quarterly unemployment growth in 11 years

The UK unemployment rate is at its highest in 11 years, and experts have every reason to believe the coronavirus will wreak even more damage on the job market as the government rolls back its job protection program.

Tax data for July showed that the number of employees employed in British businesses has dropped by 730,000 people since March, raising concerns about a potentially much larger rise in unemployment.

Gloomy forecasts are due to the fact that the government will stop stimulating the labor market by the end of October, which has provided significant assistance to residents of Foggy Albion.

«The real problem is that this is only the first wave of bad news. The fact that hiring cuts, rather than increasing layoffs of permanent staff, are the main reason for the slowdown in employment to date, bodes well for poor results in the coming months.», – said Gervin Davis, Senior Labor Market Adviser at the Chartered Institute for Personnel Development.

Minister of Finance Rishi Sunak said government support programs are working, but job losses are inevitable.

«We cannot protect individually every worker in the country, but we have a clear plan to support and create jobs so that no one is left without hope of employment or keeping a job», – he said.

A number of companies are already planning layoffs. The media, retailers and airlines also announce the imminent layoff.

Unemployment rate unexpectedly held at 3.9%. But this is due to the large number of people who continue to look for work and are not counted according to statistics. «unemployed». Also, 300 thousand people said that they work, but so far do not receive any salary, the Office for National Statistics reported..

UK records biggest quarterly unemployment growth in 11 years

Economists polled by Reuters expected unemployment rate to rise to 4.2%. Last week, the Bank of England predicted that this figure will reach 7.5% at the end of this year.

Deputy Governor of the Bank of England Dave Ramsden told the Times that the regulator still has «significant margin of safety», to expand the large-scale bond purchase incentive program again, if necessary.

Most likely, ONS will announce on Wednesday that the UK economy has fallen into recession with a 21% contraction in the second quarter.

The number of people claiming benefits rose to 2.689 million in July, up 117% from March.

Wages fell to their lowest in 10 years, down 1.2%. This is due to the fact that as part of staff conservation, many employees receive only 80% of their salary during a pandemic..