LONDON (Reuters) – The number of employees on British company payrolls surged by a record 197,000 in May as COVID restrictions eased and pubs and restaurants resumed indoor service, tax data showed on Tuesday.
The headline unemployment rate for the three months to April fell to 4.7%, the Office for National Statistics said, in line with economists’ forecasts in a Reuters poll and its lowest since August.
April’s fall in the jobless rate was the fourth in a row, and came alongside an increase of 113,000 in the number of people in employment. Economists polled by Reuters had forecast an increase of 150,000.
Britain’s headline unemployment rate has been kept down by the government’s furlough programme. This paid wages on 8.9 million jobs at its peak in May 2020, during the first COVID lockdown, and supported 3.4 million jobs in April 2021.
More recent ONS survey data pointed to a further fall to just over 2 million jobs by mid-May.
“The latest forecasts for unemployment are around half of what was previously feared and the number of employees on payroll is at its highest level since April last year,” finance minister Rishi Sunak said.
The Bank of England predicted last month that unemployment would only rise modestly when the furlough scheme stops at the end of September 2020.
However, the situation for many employers and staff in the hospitality sector will be tougher than expected over the next few weeks. A lifting of indoor capacity constraints planned for June 21 has been delayed until July 19 due to the spread of a new, more infectious, COVID variant.
Average weekly earnings in the three months to the end of April rose by 5.6% compared with a year earlier, its biggest rise since March 2007 and above forecasts.
The ONS said that this rate was distorted by large numbers of lower-paid staff still being on reduced furlough pay.
(Reporting by David Milliken, editing by Andy Bruce)
