United Kingdom Unemployment June 2020

United Kingdom

United Kingdom: Labor market stays downbeat at the start of Q3

August 11, 2020

Employment in July was down 730,000 from March according to provisional data, while the claimant count ticked up to 2.7 million from 2.6 million in June. Moreover, roughly 7.5 million people are still temporarily away from work—with many supported by the government’s furlough scheme. Taken together, this data highlights that the labor market remains weak, even though the headline unemployment rate is still at 3.9%.

More positively, the number of job vacancies rose in the three months to July from Q2’s record low, amid the reopening of the economy.

While labor market indicators could improve over the next few months due to the easing of lockdown measures, the response of employers to the end of the furlough scheme in October will be key to the evolution of the labor market further out. At least some employees are likely to lose their jobs once the scheme ends, which should see a meaningful rise in unemployment. As such, any near-term improvement in the labor market could be short-lived.

FocusEconomics Consensus Forecast panelists expect the unemployment rate to average 6.4% in 2020, which is down 0.4 percentage points from last month’s forecast, and 6.3% in 2021.


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United Kingdom Unemployment June 20 20 0

Note: Three-month average of unemployment rate in %.
Source: Office for National Statistics (ONS).


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