UK unemployment rate rises to 4.1 percent

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LONDON: The UK’s unemployment rate rose to 4.1 percent in the three months to July, with young people the hardest hit, the country’s Office for National Statistics (ONS) said Tuesday.
The jobless reading of 4.1 percent was 0.3 percentage points higher than a year earlier and 0.2 percentage points higher than the previous three months, suggesting a significant impact caused by the coronavirus pandemic.
“The number of unemployed people aged 16 to 24 years has increased on the year while other age groups remained largely steady,” the ONS revealed.
Figures showed that the estimated number of unemployed people aged 16 to 24 years in the three months to July increased by 76,000 on the year to 563,000.
Meanwhile, the Claimant Count level in August, a statistic of the number of people claiming benefits principally for being unemployed, has increased by 120.8 percent since March 2020, the ONS said.
Analysts are concerned that the labor force market will become worse since the country’s furlough scheme — a government backed job protection policy introduced during the coronavirus pandemic — will terminate at the end of October.
Paul Dales, chief economist at London-based financial analysis firm Capital Economics, said although the unwinding of the furlough scheme did not indicate a surge in job losses, “we think it is only a matter of time before that happens and the unemployment rate climbs to a peak of around 7 percent.”
“Headline unemployment rate of 4.1 percent once again gives a misleading picture of UK labour market,” tweeted Andrew Sentance, a senior adviser to UK-based global economics consultancy Cambridge Econometrics, adding that “Claimant Count has doubled… all pretty grim.” –Agencies