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UPDATE 2-UK jobless rate hits 4.5% as work protection plan nears end

Tue, 13th Oct 2020 07:19

* Jobless rate hits 4.5% vs Reuters poll forecast 4.3%

* Employment falls by bigger than expected 153,000

* Record rise in redundancies

* Vacancies show record jump too

* UK government is scaling back its jobs plan
(Adds details)

By William Schomberg and Andy Bruce

LONDON, Oct 13 (Reuters) - Britain's unemployment rate rose
by more than expected to 4.5% in the three months to August, up
from 4.1% in the three months to July, even before the end of
the government's broad coronavirus job protection plan.

Economists polled by Reuters had expected the unemployment
rate to rise more slowly to 4.3%.

The number of people in employment fell by 153,000 in the
June-to-August period, the Office for National Statistics said.

That was much higher than a median forecast for a fall of
30,000 in the Reuters poll.

"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," Jonathan
Athow, the ONS's deputy national statistician, said.

"There has also been a stark rise in the number of people
who have recently been made redundant."

British finance minister Rishi Sunak has said his priority
remains to slow the rising job losses although he has replaced
his 50 billion-pound wage subsidy scheme which expires at the
end of this month with a less generous programme.

The ONS data showed redundancies jumped by a record 114,000
on the quarter to 227,000, their highest level since 2009 when
Britain was in the grip of the global financial crisis.

However, separate tax office data showed the number of staff
on company payrolls rose by a monthly 20,000 in September,
slightly reducing the total number of job losses by that measure
since March to 673,000.

There were some other potentially positive signs in the data
including a record rise in the number of job vacancies in the
three months to September although the total remained down 40%
compared with a year earlier.

The Bank of England has forecast that the unemployment rate
will hit 7.5% by the end of the year as the government scales
back its 50 billion-pound ($65 billion) job protection scheme
and replaces it with a smaller programme in November.

BoE Governor Andrew Bailey on Monday repeated his warning
that the economy could prove weaker than the central bank's
forecasts.

Data published last week showed Britain's economy grew in
August at its slowest pace since May as its bounce-back from the
lockdown slowed, before the tightening of restrictions of
gatherings of people.

Scores of companies in Britain have announced plans to cut
jobs since the pandemic struck. Last week the owner of clothing
retailers Edinburgh Woollen Mills, Peacock's and Jaeger put
24,000 jobs at risk by saying it was set for administration.

($1 = 0.7666 pounds)

(Reporting by William Schomberg and Andy Bruce)

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