Unemployment rate in the UK highest in over half a decade

The last three months of 2020 showed record breaking unemployment rates that have not been seen in over five years.

Numbers provided by the Office for National Statistics showed that 1.74 million people were unemployed between October and December 2020, a 454,000 increase over the same quarter in 2019.

COVID-19's ripple effect on the economy

Unsurprisingly so, COVID-19's impact is reflected in the amount of people, from different sectors, that lost their jobs. The numbers show that around 726,000 fewer people are currently in payrolled employment than in pre-pandemic times.

But most staggering of all in these figures is that almost three-fifths of this decline in employment comes from those aged under 25. Roughly speaking, that is about 425,000 fewer young adults with jobs.

An early hopeful sign of economic stability to come

But although the rate in unemployment has been the highest it's been in over half a decade, the ONS believes that there are 'tentative early signs' of the labour market stabilising. In more recent statistics, reports show that there has actually been a slight increase in the numbers of employees on payroll since the beginning of 2021.

For the month of January alone, 83,000 more people were recorded having a payrolled employment compared to the last three months of 2020.

Jonathan Athow, ONS deputy national statistician for economic statistics, explains that:

Our survey shows that the unemployment rate has had the biggest annual rise since the financial crisis. However, the proportion of people who are neither working nor looking for work has stabilised after rising sharply at the start of the pandemic, with many people who lost their jobs early on having now started looking for work.

And when asked about the current high number of people still on furlough he replied that:

There is a huge amount of uncertainty about what will happen to them when that scheme ends.
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