As COVID-19 restrictions ease, UK businesses have needed to take on more staff, causing the unemployment rate to fall once again. As of April, the unemployment rate dropped to 4.7%, continuing the trend, albeit a small change at 0.01%.
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Good news for the economy, according to the Office for National Statistics, who reported that the jobs market displayed even more signs of recovery as non-essential shops and hospitality venues were allowed to open outdoors across the country earlier this year.
What’s been happening?
In order to cope with increased demand, businesses needed to hire more staff. Staff on company payrolls increased for the sixth month in a row as of May, hitting 28.5 million.
While it’s still great progress, the figures are still over half a million below the levels recorded before the coronavirus outbreak in 2020. Mainly young adults, hospitality workers, and Londoners were hit with job losses over the past year.
What do we expect next?
It remains to be seen what exactly will happen as the furlough scheme began winding down at the beginning of the month. Experts warned that thousands of jobs would be at stake if the government failed to provide adequate economic support.
As of mid-May, around 1.8 million workers were still on furlough. The furlough scheme dictates that employers contribute 10% of an employee’s wage from the start of July, rising to 20% in August, as taxpayer support is cut from the current level of 80%.
Employees will still receive the same amount and Chancellor Sunak has stressed the support the government is continuing to provide in the form of apprenticeships, placements, and support for the long term unemployed.
When the economy reopened, the jobs market experienced a bit of a bottleneck. While some businesses are still struggling to recruit enough staff, economists expect those issues to fade over the coming months.
Manage you financial plans
If your situation has changed or the state of the economy might affect you and your financial plans, get in touch with your adviser to ensure your finances stay on track.