UK jobless rate unexpectedly drops to 5.0%

LONDON (Reuters) -Britain’s jobless rate unexpectedly fell to 5.0% in the three months to January, when the country entered a new COVID lockdown, official figures showed on Tuesday, below forecasts of a rise to 5.2% in a Reuters poll.

Separate official data based on tax records showed an increase of 68,000 in the number of employees on business payrolls in February from January, though the total is 693,000 lower than a year earlier before the start of the pandemic.

“Of the decrease since then, almost two-thirds has been among the under-25s, over half has been in hospitality, and almost a third has been in London,” the Office for National Statistics’s head of economic statistics, Sam Beckett, said.

Average wage growth rose to 4.8%, its highest since March 2008, though this reflects how job losses have been greatest in low-paid sectors such as retail and hospitality, rather than higher pay for people who are still in work.

Since January non-essential shops and most businesses open to the public have been closed in England to slow the spread of more infectious variants of COVID, with similar measures in other parts of the United Kingdom.

A rapid roll-out of vaccinations has sharply reduced new infections and allowed English pupils to return to school this month. Shops are due to reopen next month, but restrictions on hospitality will remain until at least late June.

Last month the government also extended furlough support – which is currently paying the wages of one in five employees – until the end of September. Without furlough, Britain’s jobless rate would be far higher.

ONS data also indicated that the number of foreign-born workers in the final quarter of 2020 was half a million lower than the year before, based on an analysis of payroll data.

Different labour market survey data last month had pointed to a record outflow of foreign workers in 2020 – with around a million foreign-born residents leaving in total – although the ONS said the figures needed to be treated with caution as they were not designed to measure migration flows.

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