UK employment falls by biggest amount in over a decade

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Employment in the UK fell by the largest amount in over a decade between April and June, official figures show.

Employment decreased 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 those in manual or elementary occupations were most likely to be affected during the pandemic, it added.

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.”

Looming job cuts

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

However, economists fear this will change when the scheme ends in October.

From restaurant chains to retailers, scores of businesses across the UK are already planning job cuts, with 140,000 announced in June alone.

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

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

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

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

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

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It added that a large number of people were estimated to be temporarily away from work, including furloughed workers – 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 and receiving no pay in June 2020.

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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