Tuesday 15 June 2021 9:23 am

UK unemployment rate falls to 4.7 per cent as lockdown easing spurs hiring

Britain’s unemployment rate fell to 4.7 per cent between February and April, official figures showed this morning.

The rate of employment in the UK increased for the sixth consecutive month in May, with the number of payrolled employees rising by 197,000 to 28.5m.

It is however 553,000 below pre-pandemic levels, where the largest falls in employment have been in the hospitality sector, people aged under 25, and those living in London.

These three groups have also seen the largest monthly increases but are still well below levels seen in February 2020.

“The latest ONS employment figures do not begin to describe the ‘jobs boom’ that is now underway in the UK,” said James Reed, chairman of employment agency Reed.

“However, the recovery could be curtailed if staff shortages are not addressed urgently.”

Sunak reaction

April’s fall in the jobless rate was the fourth in a row, and came alongside an increase of 113,000 in the number of people in employment.

The Bank of England last month predicted that unemployment would only rise modestly when the furlough scheme stops at the end of September 2020.

“Our Plan for Jobs is working – the latest forecasts for unemployment are around half of what was previously feared and the number of employees on payroll is at its highest level since April last year,” Chancellor Rishi Sunak said.

“The furlough scheme is running all the way through until September and we are creating new routes into work through apprenticeships, Kickstart placements for young people as well as targeted support for the long term unemployed.”

Lockdown extension deals blow

However, the situation for employers and staff in the hospitality sector will be tough over the next month, after the government delayed the full lifting of lockdown restrictions.

Average weekly earnings between January and April rose by 5.6 per cent compared with a year earlier, its biggest rise since March 2007.

The Office for National Statistics said this rate was distorted by large numbers of lower-paid staff remaining on reduced furlough pay.

“This relative calm is unlikely to last and the remaining months of 2021 are likely to be turbulent for the UK jobs market,” said James Smith, economist at ING.

“Unemployment is set to rise come the end of the furlough scheme in September, though many forecasters, including ourselves, now believe the spike will be considerably less pronounced than it might have been had support ended earlier.”