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UK unemployment rate highest since 2016 as pandemic impact worsens
The government expects the jobless rate to rise to 7.5%, and a potential no-deal exit from the European Union’s single market will make it even harder for the economy to bounce back.
UK unemployment surged in the three months through October, exposing the brutal impact of the coronavirus on the economy.
The figures will revive criticism that Chancellor of the Exchequer Rishi Sunak acted too late when he expanded programs to support jobs and businesses hit by the worst downturn in 300 years. Many firms had already taken the decision to axe jobs.The number of people looking for work jumped surged by 241,000 in the period, taking the jobless rate to 4.9%, the highest since 2016, the Office for National Statistics said Tuesday.
It followed an increase of 243,000 in the third quarter, a rise last seen in the financial crisis of 2009. Job cuts, known as redundancies in the UK, increased by a record 217,000 through October, while the number of people on payrolls was 819,000 below pre-pandemic levels in November.
The government expects the jobless rate to rise to 7.5%, and a potential no-deal exit from the European Union’s single market will make it even harder for the economy to bounce back.
Rolls-Royce Holdings Plc is cutting more than 5,000 jobs this year as reduced air travel hammers its aerospace engine business. Heathrow Airport, Britain’s busiest, says it’s trying to avoid reducing staff by implementing wage cuts, prompting more than 1,000 employees to go on strike earlier this month.
The Bank of England also added stimulus in November, increasing its bond-buying program by 150 billion pounds ($198 billion) and predicting contraction in the fourth quarter. Its next policy announcement is due Thursday.
Since October, the emergence of vaccines for the virus have raised hopes that the UK economy can start getting back to normal in 2021, albeit with new barriers to trade from Brexit.
Bloomberg Economics now sees unemployment peaking at 7% next year, instead of 7.3%. Nevertheless, the Confederation of British Industry doesn’t see output returning to pre-pandemic levels until the following year.
