UK unemployment rate hit 5% but wages rose

UK unemployment

The number of payroll employees has fallen by 828,000 since February 2020

The UK unemployment rate hit 5% between September and November 2020, 1.2 percentage points higher than a year earlier and 0.6 percentage points higher than the previous quarter.

As such, for the quarter, the Office for National Statistics (ONS) estimated 1.72 million people were unemployed which is 418,000 up on the same period a year earlier and an increase of 202,000 compared to the previous three months.

The redundancy rate has also reached a record high of 14.2 per thousand (395,000), though the ONS noted that it has dropped from the peak in September.

Since February 2020, the number of payroll employees has fallen by 828,000, however, larger falls were seen at the start of the coronavirus pandemic.

Meanwhile, the UK employment rate in the quarter was estimated at 75.2%, 1.1 percentage points lower than a year earlier and 0.4 percentage points lower than the previous quarter. This takes employment estimates to 32.50 million people which is 398,000 fewer than a year earlier. The ONS said this was the largest annual decrease since December 2009 to February 2010.

Turning to wage growth, average total pay (including bonuses) among employees for the three months to November actually increased to 3.6%, and growth in regular pay (excluding bonuses) also increased to 3.6%.

But the ONS said it relates to the fall in the number and proportion of lower-paid employee jobs. It stated: Current average pay growth rates are being impacted upwards by a fall in the number and proportion of lower-paid jobs compared with before the coronavirus pandemic; it is estimated that underlying wage growth – if the effect of this change in profile of jobs is removed – is likely to be under 2%.

Elsewhere, the claimant count reached 2.6 million in December, while there were an estimated 578,000 vacancies in the UK in the three months to December, 224,000 fewer than a year ago and 81,000 more than the previous quarter.

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