The United Kingdom’s unemployment rate rose for the first time since March, when the COVID-19 lockdown was first put into place, yet data released on Tuesday also shows that whilst there was an increase in unemployment, it was not surging as it was in March.
During the three months to July, the unemployment rate increased to 4.1% from the previous 3.9% that it had fallen to since very early 2020.
The government’s coronavirus job subsidy scheme, which is now being slowed down gradually, has prevented numerous layoffs.
According to experimental figures, the number of staff on company payrolls decreased by a monthly 36,000 during August.
This fall was more than the 20,000 job losses in July, yet still only a fraction of mass layoffs during April and May.
Whilst the UK’s Office for National Statistics had previously reported 114,000 job losses for July, this figure was then revised down sharply after more data was received from employers.
Overall, throughout the period from March till August, the payroll numbers fell drastically by 695,000.
Speaking with Reuters, Samuel Tombs, an economist with Pantheon Macroeconomics, claimed that speculation shows that the unemployment rate is set to continue to rise during September and October as the furlough scheme starts to come to an end, leaving employers with more wages to pay.
He said that “The number of people searching on Google for phrases including ‘redundancy’ rocketed to a record high in July, consistent on past form with the official measure of redundancies peaking in September”.
The Office for National Statistics stated that the figures that it released might be “slightly impacted” by a change in the method of interviewing households on employment since the COVID-19 pandemic spread across the UK.
It added that the surveys, which now rely completely on telephone calls rather than face-to-face interviews, possibly under-represent those people that rent their homes and over-represent those homeowners that have a lower risk of unemployment.
Once the results were published, the Pound sterling rose briefly to 1.09 Euro from its level of 1.08 Euro which it has maintained for a week.