UK unemployment falls

Unemployment falls but under-35s shown to be hardest hit by job losses in last quarter results

The UK’s unemployment rate fell for a second consecutive month to 4.9% in the period from December to February where the country was under its third lockdown.

This figure was down from 5% previously.

The Office for National Statistics (ONS) said the fall was due to a large volume of men leaving the jobs market altogether. The inactivity rate rose by 0.2% in the three months to February 2021.

Britain's tax office, HMRC, also showed the number of employees on company payrolls fell by 56,000 between February and March, the first decline in four months.

Effects of COVID-19

That increased the total number of jobs lost since the start of the coronavirus pandemic to 813,000. 

According to the ONS, people aged under 35 accounted for 635,000 payroll jobs lost in the year to March, with 436,000 of those positions held by people under 25. Job losses in London’s hospitality sector were hit the hardest, the ONS said.

The UK’s economy shrank by almost 10% in 2020, a bigger fall than almost all its European peers, after it locked down later and for longer than many of the other countries.

But due to the fast rollout of COVID-19 vaccinations, the UK has started to ease its third lockdown and open the economy while other countries in Europe have recently tightened their restrictions.

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Job market optimism

The ONS said there was a marked rise in job vacancies in March, especially in sectors such as hospitality which reopened for outdoor business last week.

In March, UK Chancellor of the Exchequer Rishi Sunak extended his furlough scheme until the end of September 2021 although employers will have to start contributing towards some of its costs from July.

Without the scheme, the jobless rate would be much higher.

Additionally, Britain's main measure of pay growth rose strongly in the three months to February, up 4.5% in annual terms.

But the ONS said the reading was led higher by a drop in the number of lower-paid and part-time jobs. After accounting for this, pay growth was much weaker estimated at 2.5%.

 

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