Since March 695,000 jobs lost as unemployment rate hits two-year high

Since the country went in to lockdown in March, 695,000 jobs have been lost and are no longer on UK companies’ payrolls.

This is according to the Office for National Statistics (ONS), who also found that the unemployment rate increased to its highest level in two years. It increased from 3.9 per cent to 4.1 per cent in the three months to July, this equates to an increase of 62,000 to 1.4 million. With young people, being the hardest hit group as those aged 16 to 24-years-old witnessing the biggest drop in employment compared to other age groups.

This is the first time the unemployment rate has actually increased since the outbreak of COVID-19 in the UK.

There is also a fear that once the furlough scheme ends in October, the unemployment rate could reach 10 per cent this year.

However, the rate of employment has slightly increased by 0.1 percentage points to 76.5 per cent. This number was assisted by the record high amount of women in work at 72.9 per cent.

Also, job vacancies posted increased by 30 per cent from a record low in the quarter to June, this is still well below pre-pandemic levels.

Darren Morgan, director of economic statistics at the ONS said:

Some effects of the pandemic on the labour market were beginning to unwind in July as parts of the economy reopened.

Fewer workers were away on furlough and average hours rose.

The number of job vacancies continued to recover into August, too.

Nonetheless, 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.

Nye Cominetti, the senior economist at the Resolution Foundation, said:

The reopening of the economy this summer after lockdown may have boosted economic activity, but it has not spurred a recovery in the jobs market, with unemployment and redundancies rising sharply in July.

Coming before the Job Retention Scheme that is still supporting millions of workers began its phase-out, this points to an extremely challenging autumn for employment.

All the evidence is point to a mounting jobs crisis across Britain.