Home Topics Business The UK unemployment rate is falling as the workforce leaves the labor...

The UK unemployment rate is falling as the workforce leaves the labor force

© Reuters. Commuters cross London Bridge during the morning rush hour in London

By David Milliken and Andy Bruce

LONDON (Reuters) – The UK unemployment rate fell unexpectedly in the three months to January. This change partially reflected the abandonment of job hunting as lockdown measures tightened earlier in the year, official figures showed on Tuesday.

The main unemployment rate fell from 5.1% in the final quarter of 2020 to 5.0% in the three months to January, contrary to a Reuters poll forecast for a slight increase to 5.2%. None of the economists surveyed had expected a decline.

“The latest labor market data is somewhat mixed but shows considerable resilience overall,” said Howard Archer, chief economist for the UK company at the EY ITEM Club consultant.

Part of the decline in the overall unemployment rate was due solely to the high unemployment figures in October, which were outside the three-month figures.

The decrease also reflected an increase in the proportion of potential workers classified as “inactive”, e.g. B. Students, parents who look after their children all day, and people who have temporarily given up looking for a job.

This “inactivity rate” increased by 0.3 percentage points to 21.0% in the last three months, the highest level since the beginning of 2019, while the proportion of people in employment fell by 0.3 percentage points over the same period, a decrease of 147,000.

Since January, non-essential stores and most publicly accessible stores in England have been closed to slow the rise in infectious variants of COVID, with similar measures in other parts of the UK.

Last month, the government extended vacation benefits – which currently pays the wages of one in five employees – until the end of September. Without vacation, the UK’s unemployment rate would be much higher.

The rapid introduction of vaccinations has greatly reduced new infections and allowed English students to go back to school this month. Shops are slated to reopen next month, but hospitality restrictions will remain in place until at least the end of June.

Separate official data based on tax records – which some analysts consider more reliable than the main labor force survey – showed that the number of employees was down 693,000 in February last year.

Nearly two-thirds of that decline was in workers under 25, with a large proportion of the job losses in the hospitality industry and one-third of the total in London, according to the ONS.

More recently, however, there has been a boom, with the number of workers increasing by 68,000 between January and February.

These data also suggest a 550,000 year-over-year decrease in the number of non-UK nationals employed by UK companies in the final quarter of 2020.

Earlier ONS data from the Main Labor Force Survey had indicated a decrease of around 800,000 or more, although the ONS had stated that this should be interpreted with caution.

“The LFS estimates alone could significantly overstate the decline in the number of non-UK nationals,” the ONS said.[[[[

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