The British unemployment rate fell unexpectedly for the second month in a row to 4.9% during the period from December to February, most of which the country spent under a tight closure of COVID-19, they showed on Tuesday. the official data.
Economists surveyed by Reuters had largely predicted that the unemployment rate, which has been retained by the government’s huge employment subsidy program, would rise to 5.1% from 5.0% in the three months. in January.
The ONS linked the fall to a large volume of men leaving the labor market altogether. The so-called inactivity rate rose 0.2 percentage points in the three months to February, echoing a rise during the first block last year.
There was another reminder of the precariousness of the labor market in figures from the British tax office, which showed that the number of employees on companies ’payrolls fell by 56,000 between February and March, the first decline in four months.
This increased the total number of jobs lost since the onset of the coronavirus pandemic to 813,000, more than half of whom were under the age of 25, and London, the region most affected by hospitality. , said the ONS.
“If we don’t act quickly, particularly by focusing our support on the long-term unemployed, we are risking another lost generation,” said Tony Wilson, director of the Institute for Employment Studies.
Some 363,000 people are classified as long-term unemployed after being unemployed for a year or more, but with a similar number in the six- to twelve-month stretch, that figure could soon rise sharply.
Britain’s economy shrank by almost 10% in 2020, a bigger drop than almost all of its European countries, after stalling later and for longer than many of them.
But aided by the rapid deployment of COVID-19 vaccines, it is in the process of removing its third blockade while other European countries have tightened their restrictions recently.
The ONS said there was a noticeable increase in job offers in March, especially in sectors such as hospitality which reopened for outdoor business last week.
TAPER FURLOUGH
Finance Minister Rishi Sunak in March extended his curriculum (which pays the salaries of about one in five employees) until the end of September, although employers will have to start contributing to some of its costs from July.
Without the scheme, the unemployment rate would be much higher: a year ago, British budget forecasters said it could reach 10%.
The Bank of England will observe how many jobs are lost when it expires while considering the time it needs to maintain its huge economic stimulus program.
Suren Thiru, chief economist at UK chambers of commerce, said long-term unemployment, especially among young people, could mean progress towards pre-pandemic levels in the labor market behind the economic recovery wider.
“Additional actions will be needed to support the labor market when the advancement plan ends, including support for companies to hire and retain staff through a temporary reduction in employers’ national insurance contributions, ”he said.
Britain’s main measure of wage growth rose sharply again in the three months to February, with an increase of 4.5% in annual terms.
But the ONS said the reading was skewed by a drop in the number of lower-paid, part-time jobs. After explaining this, wage growth was much weaker, at 2.5%, he estimated.
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