UK unemployment surges at record pace to 2.1m

UK unemployment surged to a 24-year-high of 2.1m in April as employers laid off workers at a record pace during the Covid-19 crisis.

The extra 856,500 jobless claims during April was the biggest increase since records began in 1971 and sent unemployment to its highest since 1996, Office for National Statistics figures showed. The share of the labour market claiming out-of-work benefits rose to 5.8% from 3.5%.

The figures show the sudden collapse of activity as the government shut down businesses in late March to stem the spread of Covid-19. First-quarter employment rose 211,000, supported by a healthy labour market in January and February.

Separate figures, based on data collected by HM Revenue & Customs showed the number of paid employees fell by 457,000 between March and April, a decline of 1.6%.

The impact on jobs would have been far worse if the government had not stepped in to subsidise the wages of 7.5m workers as business activity collapsed during the economic lockdown. The government has extended its furlough scheme until the end of October and wants to reopen the economy gradually before then to prevent a sudden jump in redundancies.

Andrew Wishart, a UK specialist at Capital Economics, said: "Given the shutdown of so many businesses, the government can count the fact there have not been more job losses so far as a success. But we suspect that unemployment will continue to rise in the coming months."

Wishart predicted unemployment would rise to almost 9%. Though much of the jump may be reversed when businesses reopen joblessness will stay higher over the next few years, he said.

Frances O'Grady, general secretary of the Trades Union Congress, said: “These figures are alarming but unsurprising. It’s clear we need a solid economic plan for recovery. Extending the job retention scheme was the right first step." She called for a job guarantee scheme and measures to give workers decent wages and fair terms."