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UK Unemployment rate hits 5%, Could shoot up to 7% By Mid-2021

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Britain’s unemployment rate hit 5.0 % at the end of 2020, the highest level for more than four-and-a-half years, as coronavirus lockdowns destroyed jobs, official data showed Tuesday.

The data comes one day after administrators for collapsed UK department store chain Debenhams said it planned to shut all its outlets, costing around 12,000 jobs.

The rate for the three months to the end of November compares with 4.9 percent in the quarter to October, the Office for National Statistics said in a statement.

At 5.0 percent, the figure is 1.2 percentage points above the same period a year earlier, to reach the highest level since April 2016, the ONS added.

“This crisis has gone on far longer than any of us hoped — and every job lost as a result is a tragedy,” finance minister Rishi Sunak said.

Financial researchers, the EY ITEM Club, predicted that the unemployment rate could shoot up to 7.0 percent by the middle of the year, though that would still represent a better outcome than first expected.

Analysts expect unemployment to surge further when the UK government’s furlough scheme paying the bulk of wages for millions of private-sector workers stops at the end of April.

ONS head of economic statistics Sam Beckett noted that job “vacancies, which were rising in summer and early autumn, have been falling in the last couple of months”.

The ONS added that between February last year, ahead of Britain’s first lockdown, and December, the number of payroll employees dived by 828,000.

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