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UK unemployment rate falls as lockdown easing drives up hiring

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A group of London businesses have called on Gavin Williamson to tackle London's growing skills shortage, warning that the capital's recovery from the pandemic was on the line.
A group of London businesses have claimed a shortage of skills in the capital is threatening the economic recovery.

The UK unemployment rate dropped in the latest quarter as the easing of coronavirus restrictions continues to spark a gradual economic recovery.

Between March and May the unemployment rate fell 0.2 percentage points to 4.8 per cent, while the employment rate was up 0.1 percentage point at 74.8 per cent.

“As we approach the final stages of reopening the economy, I look forward to seeing more people back at work and the economy continuing to rebound,” said chancellor Rishi Sunak.

“We are bouncing back – the number of employees on payrolls is at its highest level since last April and the number of people on furlough halved in the three months to May.”

As restrictions were lifted over the quarter, total working hours also increased, although it remains below pre-pandemic levels, according to the Office for National Statistics (ONS).

The number of payroll employees showed another monthly increase, up 356,000 in June to 28.9m, though this remains 206,000 below pre-pandemic levels.

But in a positive sign of recovery some areas — including the North East, North West, East Midlands and Northern Ireland — have risen above February 2020 levels for the first time since the start of the pandemic.

There were 862,000 job vacancies in April to June — 77,500 above its pre-pandemic level in January to March 2020. All but one industry saw quarterly increases in their number of vacancies. 

The figures reflect early signs of recovery in the UK economy as the country looks ahead to the next stage of lockdown easing next week.

James Sproule, chief economist of Handelsbanken in the UK, said: This remains a remarkable result given the forecasts over the past year, where the economic downturn was thought set to drive unemployment towards eight per cent or more, and even forecasts from the beginning of this year were anticipating six per cent.”

The government yesterday outlined guidance for workers to return to the office gradually from 19 July, when the work from home advice will end.

But advice for employers includes calls for workers to reduce the number of people they have contact with, the use of face masks in some situations and ventilation checks in offices as cases continue to rise.