UK unemployment rate rises in line with forecasts - ONS

According to the report from Office for National Statistics (ONS), early indicators for August 2020 suggest that the number of employees in the UK on payrolls was down around 695,000 compared with March 2020.

Figures for May to July 2020 show an increase in the unemployment rate; despite this increase and an increase in the number of redundancies, the employment rate was up and the economic inactivity rate has fallen. The estimated UK unemployment rate for all people was 4.1%; this is 0.3 percentage points higher than a year earlier and 0.2 percentage points higher than the previous quarter. Looking in more detail at unemployment by age, the estimated number of people unemployed aged 16 to 24 years increased by 76,000 on the year to 563,000. Other age groups saw falls or very little change over the year.

The number of people who are estimated to be temporarily away from work (including furloughed workers) has fallen, but it was still more than 5 million in July 2020, with over 2.5 million of these being away for three months or more. There were also around 250,000 people away from work because of the pandemic and receiving no pay in July 2020.

Vacancies continued to show increases in the latest period, driven by the smaller businesses, some of which are reporting taking on additional staff to meet coronavirus (COVID-19) guidelines.

The Claimant Count reached 2.7 million in August 2020, an increase of 120.8% since March 2020.

The rate of decline in employee pay growth slowed in July following strong falls in the previous three months. For the sectors of wholesaling, retailing, hotels and restaurants and construction, where the highest percentage of employees returned to work from furlough, there was a slight improvement in pay growth for July 2020. In May to July 2020, the rate of annual pay growth stood at negative 1.0% for total pay but positive 0.2% for regular pay. The difference between the two measures is because of subdued bonuses, which fell by an average negative 21.4% (in nominal terms) in the three months from May to July 2020.