UK job losses set to rise sharply as numbers on payroll sink

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FILE - In this Thursday, April 30, 2020 file photo, a woman wearing a mask to protect against coronavirus, rides a bicycle past a job centre in Shepherd's Bush, as the lockdown to curb the spread of coronavirus continues, in London. Unemployment across the U.K. has held steady during the coronavirus lockdown as a result of a government salary support scheme, but there are clear signals emerging that job losses will skyrocket over coming months. The Office for National Statistics said Thursday, July 16, 2020 there were 649,000 fewer people, or 2.2%, on payroll in June when compared with March when the lockdown restrictions were imposed. (AP Photo/Alberto Pezzali, File)

LONDON – Unemployment across the U.K. has held steady during the coronavirus lockdown as a result of a government salary support scheme, but there are clear signals emerging that job losses will skyrocket over coming months to levels not seen since the 1980s.

The Office for National Statistics said Thursday there were 649,000 fewer people, or 2.2%, on payrolls in June compared to March, when the British government imposed lockdown restrictions.

That's an indication the country's unemployment rate is set to rise during the summer months from the still historically low level of 3.9% recorded in May.

So far, Britain has been spared the sharp rises in unemployment seen in the United States, for example, because of the government's Coronavirus Job Retention Scheme, which pays the majority of the salaries of workers who have not been fired. Some 1.2 million employers have taken advantage of the program to furlough 9.4 million people at a cost to the government of 28.7 billion pounds ($36 billion).

Though these workers have not been working over the past few months, they are not counted as unemployed. But the government is going to bring the program to an end in October, arguing that it gives “false hope” to furloughed workers while at the same time limiting their prospects of getting new jobs as their skills fade.

Instead, the government is pinning its hopes on the reopening of the economy and that there is no second coronavirus spike.

Already, many sectors, such as manufacturing, retail and hospitality have reopened, though none appears to be operating anywhere near pre-lockdown levels. The government is also expected to tweak its advice on working from home in an effort to get more people to go to the office, a move that it hopes could kickstart town centers.

“I think the best thing we can do is continue to open up the economy in a phased manner, a cautious manner, and get businesses up and running again," Business Secretary Alok Sharma told the BBC.