The latest labor market data for the U.K. showed a more downbeat picture of the health of the labor market, than had been anticipated. The employment level dropped 153k in the three months to August – its biggest quarterly drop since controls were implemented to control the coronavirus.
Accordingly, the number of people unemployed also rose by 138k over the same period. This signified that the pace of unemployment rose to 4.5 percent, well above the 4.1 percent rate reported in the last month’s release and also exceeding the median expectation of 4.3 percent.
Nevertheless, this more-sombre assessment of U.K. labor market trends should be seen in light of some methodological changes that have been adopted by the ONS in the latest report.
“With government backed job support schemes becoming less generous, and amid the renewed rise in new Covid-19 cases, this suggests that the move higher in UK unemployment has further to go still”, said Lloyds Bank in a research report.