UK unemployment rate hits highest level in three years

(Sharecast News) - The UK unemployment rate rose more than expected August, hitting its highest level in three years as the coronavirus pandemic takes its toll.
According to figures from the Office for National Statistics, the unemployment rate increased to 4.5% from 4.1% in July, coming in above consensus expectations of 4.3%.

The ONS said estimates for June to August show an estimated 1.52m people were unemployed, up 209,000 on a year earlier and 138,000 higher than the previous quarter.

Redundancies increased in June to August by 113,000 on the year, and a record 114,000 on the quarter, to 227,000. The annual increase was the largest since April to June 2009, with the number of redundancies at its highest level since May to July 2009.

ONS deputy national statistician for Economic Statistics Jonathan Athow said: "The latest monthly tax numbers show that the number of employees on the payroll was little changed in September. However, in total there were still nearly 700,000 fewer than in March, before the lockdown.

"Our newly adjusted survey figures show that in the latest period almost half a million fewer people were in work than just before the pandemic, while almost 200,000 others said they were employed but were currently not working nor earning any money.

"Since the start of the pandemic there has been a sharp increase in those out of work and job hunting but more people telling us they are not actively looking for work. There has also been a stark rise in the number of people who have recently been made redundant."

ING analyst James Smith said UK unemployment was set to rise further on the combined impact of fresh Covid-19 restrictions and the end of the original furlough scheme.

He said the unemployment rate is likely to rise towards 9-10% over the winter. "That's likely to put renewed pressure on the Bank of England to add stimulus at its November meeting."