UK unemployment rate drops slightly to five per cent
The rate of unemployment in the UK fell slightly to five per cent from November 2020 to January 2021, some 1.1 percentage points higher than the same time last year.
Estimates for November to January found 32.37 million people aged 16 years and over in employment, 611,000 fewer than a year earlier and down 147,000 on the quarter.
The latest figure is just 0.1 percentage points lower than between October and December 2020, but 0.1 percentage points higher than the previous quarter.
Sam Beckett, ONS head of economic statistics, said: “After yet another monthly increase, there were almost 200,000 more employees on payroll in February than three months earlier, although that is still nearly 700,000 down from the start of the pandemic.
“Of the decrease since then, almost two-thirds has been among the under-25s, over half has been in hospitality and almost a third has been in London.”
The annual decrease was the largest since May to July 2009 and was mainly driven by men, of which around 438,000 fewer were employed.
However, there was also an annual decrease of 173,000 for women – the largest in nearly three decades.
Between November and January harsher coronavirus restrictions were re-introduced, which led economic activity to increase, according to the ONS.
The UK employment rate was estimated at 75 per cent – 1.5 percentage points lower than a year earlier and 0.3 percentage points lower than the previous quarter.
Separate official data based on tax records showed an increase of 68,000 in the number of employees on business payrolls in February from January, though the total is 693,000 lower than a year earlier before the start of the pandemic.
Minister for Employment Mims Davies said the figuress “highlight the challenges facing us on our road to recovery, but there is reason for optimism with more workers on payrolls and over half a million vacancies out there.”
Tej Parikh, chief economist at the Institute of Directors, said:
“The labour market is showing some signs of resilience in the face of Covid-19.
“The pandemic has led to an unprecedented rise in job losses, but with continued support from the furlough scheme and the economy now gradually reopening, worst case scenarios are now slowly coming off the table”.
Parikh predicted unemployment will continue to edge up over the year,but will peak lower than expected when the pandemic first took hold.
“Many firms are still tapping into the Job Retention Scheme to keep staff onboard, as they navigate restrictions in the first quarter. This has kept unemployment from rising even higher. The extension of furlough out to September will also provide vital support for firms as they attempt to rescale in line with the reopening roadmap. Vacancies are likely to start growing again meanwhile, as businesses look to bounce back as restrictions wind down.