UK jobless claims jump to highest since 1996 as COVID crisis hits

Reuters

Posted at May 19 2020 03:17 PM

A man wearing a face mask walks past a travel worker wearing a face mask at London Victoria station in London, following the outbreak of the coronavirus disease (COVID-19), London, Britain, May 18, 2020. Toby Melville, Reuters


LONDON - A measure of the number of people claiming unemployment benefits in Britain soared to its highest level since 1996 in April, the first full month of the government's coronavirus lockdown, data published on Tuesday showed.

The claimant count rose by 856,500 - the biggest ever month-on-month leap - to 2.097 million, a 69-percent increase, the Office for National Statistics said.

A Reuters poll of economists had produced a median forecast for a leap of 676,500 in the claimant count with forecasts ranging widely from just over 56,000 to as high as 1.5 million.

The surge would have been even sharper without a government program to pay 80 percent of the wages of workers put on temporary leave by their employers, who do not count towards the unemployment total.

"While only covering the first weeks of restrictions, our figures show COVID-19 is having a major impact on the labor market," the ONS's Deputy National Statistician, Jonathan Athow, said.

Experimental data for jobs in April, based on tax figures, showed the number of people on companies' payrolls fell by 1.6 percent from March and were 1.2 percent lower than a year before.

"Vacancies were sharply down too, with hospitality again falling steepest," Athow said.

The ONS said Britain's unemployment rate fell to 3.9 percent in the January-March period, covering only one week of the lockdown, from 4.0 percent in the 3 months to February.

Employment grew by 211,000 in the first three months of the year compared with forecast for jobs growth of 50,000 in the Reuters poll.

Britain's unemployment rate could hit 10 percent in the April-June period, the country's budget forecasters have said, even with millions of workers shielded by the government's scheme to pay their wages while they are only temporarily laid off.