London unemployment rate sees largest rise in a generation
The number of people out of work in London soared over the summer, with the largest quarterly increase in the unemployment rate in over 30 years.
Figures from the Office of National Statistics (ONS) show the unemployment rate in the three months to September rose 1.2 per cent from the previous quarter to six per cent.
It is the largest quarterly increase since the ONS started tracking the data in 1992.
Mayor slams government’s ‘chopping and changing’
The mayor of London Sadiq Khan today slammed the government for its delayed response which he said had created uncertainty for many of the capital’s businesses.
“The Government’s eventual extension of the furlough scheme at 80 per cent of wages was the right thing to do, but I’m angry that the repeated chopping and changing of the scheme has created huge uncertainty for businesses over recent months and undoubtedly cost many Londoners their jobs,” he said.
The job retention scheme, which sees the government pay 80 per cent of employees’ wages, had been propping up the number of people in employment in the early days of the pandemic.
But the recent ONS figures show a labour market in rapid decline before the Chancellor extended the furlough scheme at the final hour.
It is the fourth version of the furlough scheme since Rishi Sunak first announced the support scheme ahead of the first lockdown in March.
After extending the scheme in July to see businesses through the summer, Sunak announced a Job Support Scheme in October insisting an extension of the furlough scheme would be unnecessary.
His sharp U-turn last week drew criticism with claims that his intervention had come too late for thousands of employees who were made redundant ahead of the furlough scheme deadline.
Torsten Bell, the chief executive of the Resolution Foundation said it was “hard to conclude that the messy process of returning economic policy to full lockdown mode via a two-month, five-stage U-turn is anything other than deeply sub-optimal”.
London unemployment rate higher than UK average
The sheer number of retail and businesses in the capital that have been forced to close mean London’s average unemployment figure itracks much higher than the UK’s average rate.
ONS figures published today show the UK’s unemployment rate rose 0.3 per cent to 4.8 per cent in the period. Analysts anticipate the figure rising as the second lockdown sends the economic recovery into reverse.
The Bank of England last week forecast that UK unemployment would reach 6.3 per cent by the end of this year and peak at nearly eight per cent in the second quarter of next year.
“Businesses in London’s retail, hospitality and cultural sectors still require more support until an operational vaccine is widely available, and we see a return to significant levels of international tourism… As I’ve been saying since the start of this crisis, with the right support in place further mass unemployment is not inevitable,” Khan said.