Due to the impact coronavirus has had on business in the UK, today’s ONS figures have shown that unemployment has risen by 50,000 to 1.35 million in the three months to March.
As a result, the number of people claiming unemployment benefit in the UK soared last month – during the first full month of the coronavirus lockdown. Overall, the claimant count in April went up by 856,500 to 2.1 million people. The unemployment rate was estimated at 3.9%.
The latest unemployment figures from the ONS show that there have been 856,000 extra unemployment claimants vs an anticipated 660,000.
However, while the claimant count has increased by over 800,000, according to the ONS notes themselves, this is because people are now eligible for benefits due to the CV19 crisis that previously were not, but they still remain employed.
Responding to the latest official employment figures, showing hours and vacancies fell, while productivity also decreased, Tej Parikh, Chief Economist at the Institute of Directors, said: “Even before lockdown, coronavirus was threatening to take the shine off the UK’s sterling jobs record, and initial estimates for April don’t make for easy reading. It’s clear that without the Government’s furlough scheme, the picture would have rapidly deteriorated even further.
“While furloughing is holding off some job losses for now, it’s not yet clear how firms will react as the scheme changes in August and as social distancing continues. Many companies will still be in the middle of a cashflow crisis, and will struggle with any cost increases. Government faces an onerous task in winding down the scheme without causing too much pain.
“The UK’s dire productivity record is one thing that can’t be put down to the pandemic. In fact, many businesses have been innovating more than ever in response to the lockdown. As firms get up and running again, money will be tight, and widespread debt will hold back new projects. The Government should seek to spur investment through tax incentives, otherwise companies will be slower to adapt to the new normal, and our productivity performance will remain in the doldrums.”
Founder and Managing Director of Sourced Capital, Stephen Moss
The latest figures show unemployment hasn’t spiked as a result of COVID-19, and in fact, according to the ONS, it has in fact fell. While this might not be the case months down the line, the figures show there are currently more people in jobs but unfortunately, many have jumped to incorrect conclusions without delving into the detail.
Employment, along with availability and cost of money to home buyers, is fundamental in keeping the property market buoyant and the wider economy afloat. We must ensure that we keep our heads here and refrain from adding unnecessary fuel to an already volatile fire for the sake of a quick headline.