UK unemployment rises and vacancies fall

Both employment and unemployment have risen in the UK as more people returned to the jobs market.

In December 2022 to February 2023 the UK employment rate was estimated at 75.8%, up 0.2 percentage points compared with September to November 2022. This increase in employment was driven by part-time employees and self-employed workers, the Office for National Statistics (ONS) said.

Meanwhile, the unemployment rate increased by 0.1 percentage points on the quarter to 3.8% due to a rise in the number of people unemployed for up to six months.

There was a decrease of 0.4 percentage points in the economic inactivity rate to 21.1%, but the number of people who were inactive because of long-term sickness rose to a record high.

The figures also show that job vacancies fell for the ninth time in a row, with a drop of 47,000 to 1.105 million in the three months to March, with companies citing economic pressures as a factor in holding back on recruitment.

“Job vacancies have fallen again but remain at very high levels,” said ONS director of economic statistics Darren Morgan.

“Meanwhile pay continues to grow more slowly than prices, so earnings are still falling in real terms, although the gap between public and private sector earnings growth continues to narrow.”

Average total pay (including bonuses) grew at an annual rate of 5.9% in the three months to February while regular pay (excluding bonuses) was up 6.6%. Average regular pay growth was 6.9% in the private sector and 5.3% in the public sector.

UK inflation currently stands at 10.4%.

More people moving into the workforce

A growing number of people in the UK are entering or returning to work,
new figures show.

The Office for National Statistics (ONS) said that a record number of
people moved out of economic inactivity — defined as people who are not
in work and not seeking work — between July and December, as more got jobs.

This trend was driven by young people aged 16 to 24, as well as 50-64

Focusing on the last three months of 2022, the ONS said that while some
people moved straight into a job, others others started looking for
work. This meant that although employment rose, unemployment also edged up.

The UK employment rate stood at an estimated 75.6% in October to
December 2022, 0.2 percentage points higher than the previous
three-month period. The increase in employment was also driven by
part-time workers, the ONS said.

The unemployment rate increased by 0.1 percentage points on the quarter,
to 3.7%.

Average regular pay growth in October to December 2022 was 7.3% for the
private sector and 4.2% for the public sector, with an average of 6.7%.
Excluding the height of the pandemic period, this is the highest growth
rate seen for the private sector.

After taking inflation into account, however, regular pay fell by 2.5%.

UK unemployment reaches highest level for two years

The economic fallout from the coronavirus pandemic is continuing to emerge in the UK, with new figures showing that unemployment has risen to its highest level for two years.

In the three months to July the UK unemployment rate grew to 4.1%, representing about 1.4 million people out of work, according to the Office for National Statistics (ONS). This is 104,000 more than a year earlier and 62,000 more than the previous quarter.

Young people were particularly hard hit, with the biggest drop in employment seen among those aged 16 to 24.

The monthly report also shows that redundancies increased by 58,000 on the year and 48,000 on the quarter to 156,000 — the fastest rise since the financial crisis.

It comes as businesses are preparing for the end of the furlough scheme, which has helped 9.6 million people retain their jobs during lockdown and prevented a sharper rise in unemployment so far.

Under the Coronavirus Job Retention Scheme, the UK Government initially paid 80% of people’s wages. This was reduced to 70% at the start of September, with employers expected to make up the remainder of pay, and the scheme is scheduled to end altogether on 31 October.

Chancellor Rishi Sunak has ruled out extending the scheme past the end of next month.

Commenting on the latest figures, ONS director of economic statistics Darren Morgan said that as parts of the economy reopened in July, fewer workers were on furlough and there was a rise in average hours worked.

However, he added, “with the number of employees on the payroll down again in August and both unemployment and redundancies sharply up in July, it is clear that coronavirus is still having a big impact on the world of work.”

UK employment shows biggest drop in over a decade

UK employment shows biggest drop in over a decade

The number of people in work in the UK has fallen by the largest amount in over a decade, new figures show.

It comes after the UK Government imposed a nationwide lockdown on 23 March to help stop the spread of coronavirus.

Around 730,000 people have become unemployed since March, the Office for National Statistics official statistics (ONS) said — the biggest quarterly decrease since 2009.

Younger workers, older workers and those in lower-skilled jobs were worst hit.

“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,” said Jonathan Athow, deputy national statistician at the ONS.

With many people furloughed, the ONS also registered a record low in the number of hours worked.

And there were pay decreases for those still working. Regular pay levels were down 0.2% compared with a year earlier — the first negative pay growth since records began in 2001, BBC News reported.

The next quarterly figures are expected to show a big increase in unemployment as the furlough scheme winds down.

Jeremy Thomson-Cook, chief economist at Equals Money, said that the true level of those out of work had been “very effectively lowered” by the job retention scheme and the worst was still to come.

“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,” he warned.

Capital Economics forecasts that the unemployment rate will rise from 3.9% to around 7% by mid-2021.

UK employment rate increases

Official figures for UK employment were higher from May to July this year, according to the Office for National Statistics (ONS) statistical bulletin on the UK Labour Market released on Wednesday.

From May to July 2015 there were 31.09 million people in work, an increase of 42,000 compared to February to April 2015. The latest figure is also up by 413,000 over the same period in 2014.

ONS data shows that there were 22.74 million people working full-time in the UK in the period reported, 361,000 more than the prior year, while there were 8.36 million people working part-time, a rise of 52,000 year-on-year.

The proportion of people aged from 16 to 64 who were in work, which is reported as the employment rate, amounted to 73.5%. This percentage was only slightly different compared with February to April 2015, but higher than for a year earlier, when it was recorded as 72.8%.

British people who were not in work but seeking and available to work, numbered 1.82 million, which meant there were 10,000 more unemployed people than for February to April 2015. However, this number was 198,000 fewer than May to July in 2014.

The UK unemployment rate, which represents the proportion of the labour force who were unemployed, stood at 5.5%, unchanged compared with February to April 2015. But the rate was 6.2% lower than for a year earlier.

According to the ONS report, there were 8.99 million people aged from 16 to 64 who were economically inactive, meaning those not working and not seeking or available to work. This figure was 24,000 lower than for February to April 2015 and 65,000 lower than for the year before. The proportion of people aged from 16 to 64 who were economically inactive, known as the inactivity rate, was 22.1%, flat compared with February to April 2015 but down slightly from a year earlier , when it was recorded as 22.3%.

When comparing May to July 2015 with a year earlier, both total pay including bonuses and regular pay, not excluding bonuses, for employees in the UK, was revealed to have increased by 2.9%.

Bank of England to link interest rates to job growth

The Bank of England governor Mark Carney stated today that the Bank will not raise interest rates until the high rate of unemployment in the UK has decreased from the current rate of 7.8% to 7%, or below, when the Bank would then re-examine interest rates.

According to Carney, who was appointed as BoE governor last month, about 750,000 jobs would need to be created to achieve this reduction in the unemployment figures, which could take three years. He said the unemployment threshold will hold unless inflation levels threaten to rise too quickly or if it poses a significant threat to financial stability. Also, the Bank would not cut back on its £375bn asset purchase programme, known as quantitative easing (QE), until the threshold was reached.

Analysts reportedly expect unemployment to fall slowly from its current level to an average 7.1 percent in the third quarter of 2016, the end of the forecast horizon.This indicates that the BoE expects to maintain interest rates at the same level until at least then, unless its conditions are broken. However economic data is said to show that the recovery in the UK economy is picking up pace and the jobless rate could fall significantly faster than expected. Recent official figures also revealed that there was an upsurge in manufacturing output during June this year and research has shown that the service sector and housing market is growing. Experts have forecast that UK inflation will fall to 2% in mid-2015.

The Governor commented that: “While job growth has been a relative positive in recent years, unemployment is still high. There are one million more people unemployed today than before the financial crisis; and many who have jobs would like to work more than they currently can. The weakness in activity has also been accompanied by exceptionally weak productivity. It is for these reasons that the MPC judges there to be a significant margin of slack in the economy, even though the extent of that slack, particularly the scope for a productivity rebound, is very uncertain.”

Unemployment in Spain reaches new heights as tourism trade slows

Unemployment in debt-ridden Spain rose by 1.7% in September, according figures released by the country’s Labour Ministry on Tuesday.

The increase in unemployment last month follows an increase in August, with 4.7 million Spaniards currently out of work.

Analysts attribute the increase to redundancies in the service sector as the steady flow of summer tourists slows, with seasonal jobs being terminated in the winter months.

“There is a certain slowing down in the rate of increase in unemployment but the negative side is that jobs are still disappearing,” Estefania Ponte, head of economy at trading house Cortal Consors, told Reuters.

Ponte said that today’s monthly figures suggested that the unemployment rate in Spain will mostly exceed 25% in the third quarter.

Unemployment in Spain, one of Europe’s largest economies, is the highest in the European Union. Analysts are also expecting that recent floods due to torrential rains could further dent tourism activity.


Wage subsidies brought forward to address youth unemployment in 20 “hotspots”

Areas of the UK with high levels of youth unemployment are to benefit earlier from government help designed to tackle the problem, Deputy Prime Minister Nick Clegg announced today.

Under the plan, wage subsidies to firms hiring out-of-work 18 to 24-year-olds are to be triggered early in certain “hotspots” of unemployment among young people.

In 20 deprived towns and cities, principally in South Wales, Scotland and the North and Midlands of England, the payments will be available for young people who have been out of work for six months instead of nine.

Part of the government’s GBP1bn Youth Contract which was launched late last year, the subsidy of GBP2,275 is designed to encourage firms to take on young workers. It covers six months of employment and is equivalent to half the UK’s minimum wage for a young person.

Announcing the plan at the CBI Action for Jobs Summit, Nick Clegg said that the problem of youth unemployment predates the financial crisis and targeted support must be provided “to the youngsters who struggle to break into the workplace – regardless of whether we’re in good times or not.”

This opinion was shared by CBI director-general John Cridland, also speaking at the today’s jobs summit, who commented that youth unemployment has been rising since 2004 and said that a return to growth alone will not be enough to tackle the underlying causes of the problem.

Cridland urged businesses and the government to work together to do more to give people the skills and opportunities they need to get jobs. He also called for the range of employment initiatives to be made simpler for employers, noting that employers in England alone face 47 different initiatives that offer funding and support for businesses taking on and training young unemployed people.