THE size of the unemployment crisis facing Britain was laid bare today when official figures showed benefits claims soaring and job vacancies plummeting.
After years of a near jobs miracle that saw record numbers in employment, Covid-19 is taking a brutal toll.
Figures from the ONS today show that the number of staff on UK payrolls fell by 612,000 between March and May.
While the headline unemployment rate is steady at 3.9% — far better than the 4.7% forecast — economists say that’s a “false reality” with trouble coming soon.
Simon French at Panmure Gordon said “This is one of those days where you can clearly see the storm on the horizon. The unemployment rate, at 3.9%, is like Dad happily charring the sausages on the BBQ. A closer look at the Universal Credit and Furlough data suggests he is about to get absolutely soaked.”
ING said in a note to clients: “Job vacancies have plunged, almost back to levels seen in the financial crisis. Meanwhile some experimental statistics, based on payroll data, showed around a 600,000 fall in the number of people being paid since March.”
The Institute for Employment Studies claims UK unemployment has risen more in the last two months than it did in the first year of the Great Depression.
Claimant unemployment is already up by 1.6 million since March to 2.8 million. In the whole year after the 1929 Wall Street Crash it rose by 1.0 million.
Steep falls in vacancies also mean that more claimants are competing for fewer jobs. Before the crisis began, there were 1.5 claimants for every vacancy. Right now, IES estimates that that figure has increased to 8.5 claimants per vacancy.
Tony Wilson, director of the Institute for Employment Studies, said: “If the public health crisis is just starting to ease, today’s figures show that the unemployment crisis is only just beginning. There can be no doubt now that we are on course for claimant unemployment of three million by next month, and it may well reach the highest ever recorded. It’s clear too that this crisis is hitting many poorer areas hardest — with coastal towns and ex-industrial areas seeing particularly big increases in unemployment.”
The winding down of the Job Retention Scheme is likely to increase the size of the problem. Some say the Government should cut employer National Insurance in a bid to protect jobs.
More than one in four UK workers — some 8.9 million — are now on the government’s furlough scheme that allows them to receive 80% of their monthly salary up to £2,500.
