The UK unemployment rate advanced in three months to July and payroll employment declined despite easing of lockdown measures, data from the Office for National Statistics revealed Tuesday.
The jobless rate came in at 4.1 percent in three months to July, which was 0.2 percentage point higher than the previous quarter. The rate came in line with expectations.
It is encouraging that the start of the unwinding of the furlough scheme in August has not led to a surge in job losses, Paul Dales, an economist at Capital Economics, said.
But it is only a matter of time before that happens and the unemployment rate climbs to a peak of around 7 percent, Dales added.
The number of people unemployed increased by 76,000 on the year to 563,000 in three months to July.
The ONS said despite an increase in the unemployment rate and an increase in the number of redundancies, the employment rate was up and the economic inactivity rate has fallen.
During May to July, employment increased by 202,000 from the last year but decreased 12,000 from the previous quarter. Employment among youth decreased by 156,000 over the quarter to 3.63 million.
The number of employees on payrolls was down around 695,000 compared with March 2020.
Data showed that claimant count rose by 73,700 from the previous month to 2.7 million in August. The expected rise was 100,000.
Although the number of people temporarily away from work has declined, it was still more than 5 million in July. There were also around 250,000 people away from work because of the pandemic and receiving no pay in July 2020.
Further, the ONS said the rate of decline in pay growth slowed in July. The growth has been affected by lower pay for furloughed employees and reduced bonuses.
Average earnings including bonus decreased 1 percent in May to July, while excluding bonus, regular pay gained 0.2 percent.
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