Figures this week likely to show unemployment rate ticking higher
Figures this week are likely to show unemployment continuing to rise despite government efforts to limit the fallout from the pandemic.
Jobless numbers have been creeping higher since the outbreak hit, reaching a UK three-year high of 4.5 per cent in the three months to August, or some 1.5 million people. Many economists expect that total to surge in the months ahead as more businesses collapse or lay large numbers of staff off.
The latest official unemployment statistics are due to be released on Wednesday.
Russ Mould, investment director at AJ Bell, said: “Despite the government efforts to support the labour market, through the extension of the furlough scheme, among a range of initiatives, the UK jobless rate has started tick higher.
“In the three months to August, the unemployment rate reached a three-year high of 4.5 per cent, or some 1.5 million people. Further increases seem possible, especially in light of local lockdowns and the fragile nature of the recovery although it is likely the numbers would have been an awful lot worse without government intervention.
“Rising joblessness, and fears of further job losses, are acting to cap wage growth, which ebbed to zero in August. Even with inflation pretty modest, that is not helpful for consumers’ ability to spend.”
He said two other numbers would be worth watching in the latest monthly dataset – the claimant count, which includes those who are not only unlucky enough to be without work but also those on low incomes who still require assistance in the form of universal credit, as well as the latest job vacancy figures.
Last week, it was announced that the jobs furlough scheme set up in the wake of the coronavirus outbreak is to be extended until the end of March.
In a major U-turn by the UK government, Chancellor Rishi Sunak said the move was needed because of the economic situation caused by the Covid-19 pandemic.
Sunak said the government’s highest priority remains “to protect jobs and livelihoods”. He had previously extended the furlough throughout November due to the second national lockdown in England. The Chancellor also defended the government’s actions in the face of the crisis.
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