Coronavirus: UK payrolls shrink by 649,000 jobs in lockdown

Posted on 16 Jul 2020
Coronavirus: UK payrolls shrink by 649,000 jobs in lockdown

The number of workers on UK payrolls has fallen by 649,000 between March and June, official figures indicate.

The number of people claiming work-related benefits - including the unemployed - was 2.6 million.

However, the total was not as big as many feared, because large numbers of firms have put employees on the government-backed furlough scheme.

Economists say the full effect on employment will not be felt until the scheme ends in October.

Because of the effect of the furlough scheme on the employment market, analysts say the number of hours worked per week is currently a truer reflection of the impact of the coronavirus crisis.

The Office for National Statistics (ONS) said that since the start of the pandemic, total weekly hours worked in the UK had fallen by a record 175.3 million, or 16.7%, to 877.1 million hours.

"This was the largest annual decrease since estimates began in 1971, with total hours dropping to its lowest level since May to July 1997," the ONS added.

"Vacancies in the UK in April to June 2020 are at the lowest level since the survey began in April to June 2001, at an estimated 333,000; this is 23% lower than the previous record low in April to June 2009."

The figures came as a survey by the British Chambers of Commerce (BCC) said 29% of businesses expected to decrease the size of their workforce in the next three months. The BCC called for a cut in employers' National Insurance contributions to protect businesses and jobs.

At the same time, the Resolution Foundation think tank said the way the UK reports unemployment may not reflect the "true scale of joblessness".

The ONS said: "Despite the lack of overall increase in the number of unemployed, the estimated number of people unemployed aged 16 to 24 years increased by 47,000 on the year while other age groups remained steady."

It added that a larger than usual number of those losing their jobs were not currently looking for another one and were therefore economically inactive rather than unemployed.

"In addition, an increased number of respondents who were previously unemployed have moved to economic inactivity," it said, "suggesting that some who were previously unemployed are no longer looking for work."

The government's spending watchdog, the Office for Budget Responsibility, has warned that in the worst-case scenario, unemployment could rise to four million.

 

Read more here 

www.bbc.co.uk/news/business-5342730