More than 782,000 people lost their jobs in the UK between March and October, according to new official figures. The unemployment rate continues to rise, rising from 4.5 percent to 4.8 percent in the three months to September as the coronavirus continued to affect the labour market.
In the past month alone, 33,000 people lost their jobs, increasing the unemployment rate by 0.9 percentage points compared to the previous year, according to the Office for National Statistics (ONS).
Layoffs rose to a record high of 314,000 in the three months to September as companies laid off workers in anticipation of the end of the UK government’s leave program, which paid a percentage of salaries and was originally scheduled to end at the end of October.
It has now been extended until the end of March 2021, with workers who are unable to work receiving up to 80 percent of their salaries, but analysts say the extension came “too late” as they expect another large increase in unemployment in the coming months.
Mariano Mamertino, senior economist for Europe at LinkedIn, told Washington Newsday that the news that a COVID vaccine from U.S. pharmaceutical company Pfizer, in collaboration with the German BioNTech firm, is “more than 90 percent effective in preventing COVID-19” is welcome, “but we’re not out of the woods yet.
“There are still many uncertainties regarding the timetable as well as the production and distribution of the vaccine,” says Mamertino. Employer confidence, especially in the hardest hit sectors such as hospitality, retail and travel, will receive a real boost once we have more certainty on these issues. When the economy reopens, it will take some time for the labor market to fully recover, and even then it will probably look different,” says Mamertino.
At LinkedIn, competition for jobs peaked in June, and since then competition has eased thanks to a steady increase in the number of jobs advertised.
“The picture for jobseekers is better than we saw at the peak of the first wave, but the reality is that competition for jobs in October was still 33 percent higher than a year ago,” says Mamertino. “We are watching closely the impact of the second wave of the virus, because it is possible that it will make the picture even more difficult.
England, like many other countries in Europe, is in the middle of a second COVID ban, with Scotland, Wales and Northern Ireland applying their own public restrictions.
Will the positive news about a possible vaccine on the horizon be enough to counteract the effects of a second lock on the labour market? As the end date of the brexite transition on 31 December is fast approaching and the extension of the vacation leave may be masking the true extent of the jobs lost due to the pandemic, Mamertino is uncertain.
“In the first months of 2021, there is a high level of uncertainty,” he says. “The rejuvenation of the vacation arrangements next March will probably place an additional burden on the already difficult labor market prospects. Containing the virus is the key to improving labor markets, so the positive news of a vaccine is something we can celebrate”.
Dave Innes, head of the Joseph Rowntree Foundation’s economic department for poverty reduction, said the “last-minute decision” to extend leave until 2021 “will cost jobs and offer little comfort to those who have already been laid off,” as Christmas is just around the corner. “Even the poorest will be hit hardest,” he said. “Low-paid workers are more likely to work in sectors where jobs are most at risk”.
Suren Thiru, head of the economic department of the British Chambers of Commerce, expects unemployment to rise further. “As companies face another wave of sharply reduced cash flows and revenues and the gaps in government support remain, a further significant increase in unemployment is likely in the coming months,” Thiru said.
Jonathan Athov, the ONS’s Deputy National Statistician for Economic Statistics, said unemployment rose sharply in the three months to September as people who had previously lost their jobs in the pandemic started looking for work again. “Job vacancies continued to recover from the very low figures at the beginning of the year, but these figures precede the reintroduction of restrictions in many parts of the UK