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UK economy loses 700K jobs to pandemic

15 Sep 2020 12:24 PM

The British labour market took a turn for the worse in July even as the economy gradually reopened, raising the total pandemic-related job losses pandemic to nearly 700,000 and increasing pressure on the government to expand support programs.

The Office for National Statistics said today that employment has decreased by 102,000 jobs, the first drop since April. The unemployment rate in July was 4.4%, the highest since 2018.

The number of employees on payrolls in August decreased by 695,000 from March, compared to 659,000 in July. The number of people claiming unemployment benefits rose to 2.7 million, an increase of 121% since March.

This has left the government facing mounting calls to extend its furlough programme - as other European countries have done. The UK faces a triple whammy of rising unemployment as aid ends, new restrictions on activity as cases mount, and a potentially turbulent Brexit at the end of the year.

Most economists expect heightened uncertainty to prompt the Bank of England to increase monetary stimulus later this year. Policymakers may lay the groundwork for that when they meet this week.

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