Payroll numbers rise but under-25s hit hardest

·3 min read

The number of workers on company payrolls in the UK climbed by 200,000 in the three months to February, amid signs that the jobs crisis may be stabilising.

However, the number on payrolls is still 693,000 lower than last February, before Covid lockdown measures began.

People aged under 25 continue to bear the brunt of the job losses, the Office for National Statistics said.

It came as the unemployment rate stood at 5%, down from 5.1% previously.

Sam Beckett, ONS head of economic statistics, told the BBC's Today programme there was still a lot of uncertainty in the jobs market.

"Furlough is still doing a lot of heavy lifting in the labour market. There are around five million people still on furlough, it's down from its peak of nine million but has been rising recently.

"But you have to remember the underlying picture is that close to 700,000 people have come off the payroll since the start of the pandemic so there has been a large fall in employment since the start

"Young people have borne much of the brunt, around two-thirds of the fall is under-25s. London has been particularly hard hit."

Crisis easing?

The latest figures cover a period when most parts of the UK entered strict lockdowns.

However, the number of workers on payroll increased for the third month in a row in February, the ONS said.

The number of redundancies across the UK also fell slightly to 11 per 1,000 people in January - down from 14 per 1,000 two months ago.

Despite this, the ONS said the jobs crisis remained acute. Some 368,000 payroll jobs have been lost in the hospitality sector since before the pandemic began, as lockdowns and restrictions hammered the industry.

And 123,000 payroll jobs were also lost in the hard-hit retail sector.

Nonetheless, commentators said they believed the worst may soon be over as the vaccine programme gradually allows the UK economy to reopen.

"Overall, we think employment is getting close to its trough," said Capital Economics in a research note. "We still expect the unemployment rate to rise to 6% by early 2022, but the bulk of that will be driven by those who left the labour force returning, rather than people losing their jobs."

It echoes projections from the government's fiscal watchdog, the Office for Budget Responsibility, which has forecast that the unemployment rate will peak at 6.5% this year instead of the 11.9% predicted last July.

Analysis box by Faisal Islam, economics editor
Analysis box by Faisal Islam, economics editor

Unemployment stayed generally stable in January despite further national lockdowns. On some weekly or monthly measures, joblessness actually fell a little to just below 5%, despite the compulsory closure of large swathes of the hospitality industry at the beginning of the year.

This is thanks to two factors - the fact that five million people are on the furlough scheme and the fact that employers have become better adapted to lockdowns.

The ONS also tried to assess just how many foreign workers left the UK last year. While some estimates had put the fall at over one million, the ONS suggested the fall was around 180,000, or the same as the population of the city of Portsmouth.

That is entirely the result of EU workers leaving the UK. The number of non-EU workers actually increased a little during the pandemic.

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