The UK unemployment rate fell to an eight-month low in April as pubs and restaurants reopened

UK economy reopens
The UK economy is gradually reopening from coronavirus lockdowns.

  • The UK unemployment rate fell to an eight-month low in April as pubs and restaurants reopened.
  • Pay also picked up sharply, rising 5.6% on average in the three months to April.
  • The Bank of England expects UK unemployment to peak just below 5.5% in 2021.
  • See more stories on Insider’s business page.

The UK unemployment rate fell to an eight-month low of 4.7% in the three months to April, official figures showed on Tuesday, as the reopening of key parts of the economy boosted the jobs market.

April’s figure was below the 5% unemployment rate seen in the previous quarter and was the lowest figure since the three months to August 2020.

Separate data from the ONS showed that the number of employees on payrolls surged in May by 197,000, the most on record.

The labor market recovery was seen in pay packets too, with Britons’ average total pay for the three months to April jumping 5.6%. However, economists said the figure was flattered by last year’s low base.

“Our plan for jobs is working,” said UK Chancellor Rishi Sunak. “The latest forecasts for unemployment are around half of what was previously feared, and the number of employees on payroll is at its highest level since April last year.”

Britain’s rollout of coronavirus vaccines has been one of the quickest in the world. It allowed the government to start easing restrictions meaningfully in April, when non-essential stores reopened, and pubs and restaurants began to serve people outside.

The UK government’s job-retention scheme – widely known as “furlough” – has also kept a lid on unemployment by paying the wages of workers who might otherwise have lost their jobs.

UK unemployment peaked at 5.1% in the three months to December, compared with a 14.8% peak in the US in April 2020.

The Bank of England said in May it expects UK unemployment to pick up again slightly and peak just below 5.5% in the third quarter of 2021, when the furlough scheme winds down further.

Yet the reopening of Britain’s economy has not been completely smooth. Prime Minister Boris Johnson on Monday evening said his government would have to delay the next stage, due to a surge in cases of the Delta coronavirus variant, which was first found in India.

The pound edged up after the data, to trade 0.1% higher against the dollar at $1.412, close to session highs.

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UK unemployment rate hits 4-year high in final quarter of 2020 but data shows ‘tentative’ signs of stabilizing

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The UK economy suffered the worst slump in the G7 in 2020

  • The UK unemployment rate rose to 5.1% in the fourth quarter of 2020, the highest since 2016.
  • Yet company payrolls rose in January, when the UK went into national lockdown, suggesting the jobs markets may be stabilizing.
  • The UK suffered the worst slump out of the G7 in 2020 and has seen more than 120,000 deaths.
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The UK unemployment rate hit 5.1% in the final quarter of 2020, its highest since 2016, as tough coronavirus restrictions caused companies to lay off workers, according to official data on Tuesday.

Yet the UK’s Office for National Statistics said there were some “tentative” signs of stabilizing, with separate data showing the number of employees on company payrolls rose by 83,000 in January from December.

The coronavirus pandemic has been particularly painful for the UK, which has suffered more than 120,000 deaths and the worst economic slump in the G7.

However, the UK has been one of the fastest at rolling out coronavirus vaccines. This allowed Prime Minister Boris Johnson to lay out a “roadmap” on Monday that could see the whole of the economy reopened by the summer.

The 5.1% unemployment rate in the final quarter of 2020 was up from 4.7% in the previous quarter and 3.8% a year earlier, the ONS said. It was the highest figure since early 2016.

It meant an estimated 1.74 million people were out of work in the period. That was 454,000 higher than a year earlier.

Yet ONS deputy national statistician Jonathan Athow said that the separate payroll figures “show tentative early signs of the labour market stabilizing, with a small increase in the numbers of employees paid through payroll over the last couple of months.”

Though he added that there are “still over 700,000 fewer people employed before the start of the coronavirus pandemic.”

The UK government’s job support scheme – known as furlough – has kept a lid on unemployment by paying the wages of workers who may otherwise have been laid off. It supported more than 9 million workers at its peak in 2020.

The Bank of England predicted earlier in February that unemployment would rise to close to 8% by the middle of 2021 after the scheme closes. However, chancellor Rishi Sunak is reportedly planning to extend the program in his March 3 Budget, which lays out the Treasury’s economic policies.

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