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UK Unemployment Rate Rises to 5.1% in Q4 2020 on Covid-induced Lockdown

February 23, 2021
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UK Inflation Inches up to 0.7%, Driven by Higher Food Prices
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The unemployment rate in the UK increased to 5.1% in the three months to December of 2020 from 5% in the previous period and in line with forecasts. It remains the highest jobless rate since the three months to August 2016, as the country was under another national coronavirus lockdown in December.

Still, unemployment has been held down by the government’s Job Retention Scheme which is supporting about 4 million jobs, that is, one in five employees. The employment rate continued to fall to 75% while the number of vacancies rose by 64,000 to 599,000 in the three months to January. The number of redundancies rose by 29,000 to 343,000, the least since the second quarter.

Meanwhile, average earnings growth accelerated more quickly than expected to 4.7%, the highest since 2008 driven in part by compositional effects of a fall in the number and proportion of lower-paid employee jobs, and by increased bonuses, which had been postponed earlier in the year.

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