UK battles unemployment surge despite ease of restrictions

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U.K.’s Office for National Statistics (ONS) has shown in an official data published early on Tuesday September 15, 2020, that U.K has recorded a surge in unemployment despite easing lockdown restrictions across the country.

According to the ONS, unemployment rate rose from 3.9% for the previous three months to 4.1% from the month of May to July, with May being the onset of lockdown in the U.K.

As estimates have shown, people who were 16-year-old and above with a total of 32.98 million people were at work. While in the previous year, about 202,000 were in employment but declined to 12,000 since May through July.

The data specifically showed a sharp contrast between men and women employment rates. The number of men employed in the previous quarter was 22,000 which contrasts markedly with 34,000 decrease in the figures for women.

“The small quarterly decrease in employment was the result of large decreases in employment for young and older workers (people aged 16 to 24 years and those aged 65 years and over), the self-employed and part-time workers being almost completely offset by increases in employment for workers aged 25 to 64 years and full-time employees,” the ONS said.

Meanwhile, the U.K. government has, in an attempt to avoid job cuts by employers due to coronavirus pandemic, subsidized wages of workers through its Furlough scheme under which it has paid about 80% of workers’ wages which is equivalent to £2,500 ($3,272).

However, since August employers and businesses have had to share the responsibility of paying parts of their workers’ wages who are under the scheme.

With the scheme which ends on August 31, it is possible that the latest data may not have shown the true picture of unemployment rate in the U.K.

“This is a difficult time for many as the pandemic continues to have a profound impact on people’s jobs and livelihoods. That’s why protecting jobs and helping people back into work continues to be my number one priority,” said, Rishi Sunak, the U.K.’s Finance Minister, while commenting on the data.

Paul Dales, U.K. Economist, Capital Economics’ Chief, while speaking about the possible increase in unemployment as soon as the scheme ends, said,“We still think that employment will fall more sharply and unemployment will increase more quickly as the furlough scheme continues to unwind and ceases at the end of October.”

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