Increase in unemployment in UK as 649,000 people lose jobs due to impact of COVID-19

The Office for National Statistics (ONS) has this morning released a new report which has revealed the number of people in the UK who are now unemployed as a result of the COVID-19 pandemic has risen to 649,000.

The data is from March to June, with further job cuts being announced every day in a wide range of sectors – most prominently, across the retail industry.

As a result, the number of people claiming work-related benefits rose to more than 2.6 million in the same time period.

Furthermore, with many businesses now able to take staff off of furlough leave – there could be a large wave of job losses in the near future.

ONS also revealed that since the start of the coronavirus enforced lockdown, total weekly hours worked in the UK had fallen by a record 175.3 million (16.7%), to just 877.1 million hours.

The report said: “This was the largest annual decrease since estimates began in 1971, with total hours dropping to its lowest level since May to July 1997. 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.”

Industry reaction

Mariano Mamertino, EMEA Economist at LinkedIn

Today’s figures present a bleak picture for the UK labour market and signal the challenging times ahead for job seekers. The true extent of jobs losses is slowly starting to show in the unemployment rate, but it remains largely masked, principally due to the furlough scheme. Over the past few weeks we’ve seen a high number of jobs being cut across the hardest hit industries, as businesses adapt to the harsh realities of changing consumer demand due to the global pandemic.

The small uptick in GDP registered in May is not yet translating into a rebound in employment. While LinkedIn data shows that hiring is gradually improving across most industries in the UK, it remains well below last year’s levels. The sharp fall in pay growth also reflects the wage cuts that are being felt by those on furlough, and the measures companies have been forced to introduce such as reducing hours and bonus payouts.

The UK is undoubtedly facing the toughest jobs market in a generation. LinkedIn data finds that competition for jobs is three times higher today compared to this time last year. Jobseekers face an uphill battle, but we believe a major focus on reskilling, and in particular digital skills, will help get many people in the UK back to work. We’re committed to helping solve the skills gap by offering free learning resources, which are available to everyone, to help people find long-term, secure jobs for the future.

James Reed, Chairman of REED

Today’s employment statistics paint a bleak picture of how lockdown has affected the UK’s economy. Even with the government’s recently announced measures to support ‘jobs, jobs, jobs’, the labour market is on a knife edge. The risk of mass unemployment remains high.

Hopes of a V-shaped recovery were dashed earlier this week by May’s disappointing GDP figures. Now the ONS unemployment statistics suggest the UK’s economic trajectory could look more like a game of snakes and ladders. It’s clear that the road to recovery will be long and that there’ll be lots more ups and downs along the way.

Nevertheless, green shoots are beginning to appear in different sectors of the jobs market. There were marked increases in Financial services and estate agency roles on reed.co.uk last month, and there are over 10,000 jobs available separately in education and health and medicine. Furloughed or unemployed workers may need to consider their transferrable skills or reskilling and upskilling to adapt to new sectors where the opportunities exist.

There is no doubt the government has been generous in its job support packages. As we move towards the next phase of economic recovery there needs to be further measures brought in beyond the Chancellor’s summer statement to help speed up jobs growth and protect livelihoods. No options should be taken off the table. There is a concerted effort to support the sectors hardest hit by the pandemic, and to help train young workers. But more should be done to unleash apprenticeships and increase young peoples’ skills.

Government and business will need to work constructively and creatively to help support the jobs market – our Keep Britain Working campaign is doing exactly this. By bringing together business leaders and workers we’re now developing ideas such as reforming National Insurance, improving employment law and expanding research and development that will support the jobs market and help us recover from this economic upheaval. We must do all that we can to ensure that jobs, jobs, jobs does not become dole, dole, dole.