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Rishi Sunak saves UK economy! Unemployment rate holds steady in new ONS data

Experts were last night fearing the biggest single-month drop in employment on record, expecting this to rise to 4.7 percent. But the number of UK workers on company payrolls decreased by more than 600,000 in the same period.

The number of people claiming benefits has also continued to rise with COVID-related changes to Universal Credit meaning that more people are eligible for help.

The report shows the reduction in total hours worked is a record both in the year and the quarter, demonstrating the value of the furlough scheme.

Unemployment would have been higher had it not been for the government’s job retention scheme.

Labour Force Survey (LFS) data, covering the period up to end of April 2020, shows that weakening employment rates are particularly affecting the self-employed and men.

Rishi Sunak saves UK economy! Unemployment rate holds steady in new ONS data

Companies cut more than 600,000 as the economy reels from virus (Image: Getty)

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Rishi Sunak saves UK economy! Unemployment rate holds steady in new ONS data

The UK high street reopened this week, taking people off furlough. (Image: Getty)

Economic inactivity also rose slightly, estimated to now be at 20.5 percent.

Meanwhile, the number of vacancies listed in May has skidded to a record low.

There were an estimated 476,000 vacancies in the UK in March to May 2020; this is 342,000 fewer than the previous quarter and 365,000 fewer than a year earlier.

Pay has fallen in real terms for the first time since the beginning of 2018 in the three months to April. Understandably, pay fell in industries where furloughing has been common, many of these being the lowest-paid workers.

READ MORE: Rishi Sunak’s furlough scheme has locked out more than one million Britons – shock report

Rishi Sunak saves UK economy! Unemployment rate holds steady in new ONS data

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Meanwhile, the number of vacancies listed in May has skidded to a record low. (Image: Express Finance / Getty)

There was a particular fall in pay in the accommodation and foodservice industries.

James Reed, Chairman of REED, Britain’s biggest recruitment firm commented: “What was sadly a health emergency is now rapidly becoming an employment crisis. Millions of jobs are now at risk and what we’re seeing may just be the tip of the iceberg.

“There’s a real danger that unemployment could go above 15%, and as the clock continues to tick on the Government’s generous Job Retention scheme, job seekers and businesses face an unforgiving employment landscape,” he continued.

“We need to act now if we’re to ease the economic effects of the lockdown. Existing jobs must be protected, job seekers need support finding new roles, and furloughed workers should be redeployed or reskilled.

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Rishi Sunak saves UK economy! Unemployment rate holds steady in new ONS data

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Chancellor Rishi Sunak (Image: Getty)

“We must also find constructive ways to accelerate jobs growth and protect livelihoods – in fact, it must become one of the government’s number priorities.”

Yesterday, a new Treasury select committee report revealed that a million Britons could still be locked out of government support schemes.

Chancellor Rishi Sunak has previously stated that he will do “whatever it takes” to keep the economy afloat, but some are falling through the cracks in the system. Over a million people have lost livelihoods while being in lockdown and locked out of support.

PwC senior economist Jing Teow said: “Today’s data shows just how hard the coronavirus has hit workers across the country. Employment and unemployment rates have remained broadly unchanged over the three months to April.

“However, this picture belies the significant number of workers (8.9 million, or one in four) being furloughed as a result of the fall in economic activity as these workers are still classified as being employed.”

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