MNI DATA IMPACT: UK Job Losses Accelerate In August

Job losses accelerated in August, adding to the pressure on Chancellor of the Exchequer Rishi Sunak to extend the UK furlough scheme beyond October, data released Tuesday by the Office for National Statistics showed.

Employment fell by 36,000 between July and August, according to PAYE data compiled by HMR, the biggest fall in 4 months, taking job losses to 695,000 since March. This series has been subject to heavy revision; employment fell by a revised 20,000 in July, compared to the originally reported 114,000 decline.

Job losses derived from the LFS survey were less dramatic, slipping by just 12,000, compared to analysts' forecasts of a 125,000 decline. National statisticians admitted that the telephone survey undergirding the data may undercount workers living in rented accommodation. The unemployment rate increased to 4.1% from 3.9% in the three months to June, the highest rate since March of 2018

Hours worked increased marginally to 26.3 per week from the record-low 25.8 recorded in the three months to June, while the number of people claiming Universal Credit rose by 73,700 in August, following a downwardly-revised 69,900 increase in July. That takes the claimant rate to 7.6%, the highest ratio since July of 1995. However the claimant rate includes workers filing for benefits other than Jobseekers' Allowance and may overstate the level of unemployment.

Unemployment rose to 4.4% in July, according experimental statistics, the highest level since March of 2018. Self employed workers have borne the brunt of the job losses, falling another 154,00 in the three months to July, after a record-high 238,000 decline in the second quarter. That takes the self-employment rate — as a percentage of all workers — to 14.4% from 15.3% at the end of last year. 14.7% three months to May.

Vacancies fell by 48,000 between June and August over the three months ending in May, bringing the total number of vacancies to 434,000, well above the record-low recorded in the three months to April.

Total pay — including bonuses — continued to fall in both nominal and real terms. Average weekly earnings declined by an annual rate of 1.0%, after a 1.2% decline in the second quarter. Adjusted for inflation, pay fell by 1.8%, extending a 2.0% decline in the three months to June. Excluding bonuses, regular pay rose by 0.2% in the three months to July, while real wages declined by 0.7%.

The acceleration in job losses could prompt a headache for Chancellor of the Exchequer Rishi Sunak, who has come under pressure to extend the Treasury's furlough scheme which expires at the end of October. Recent data from the Institute for Employment Studies suggest that 445,000 jobs are at risk in the three months ending in September.