730,000 jobs disappear as UK falls into record recession

Unemployment is rising at its fastest rate in over a decade as over 20% is lost from GDP.

14 Aug 2020| News

Nearly three-quarters of a million jobs have been lost since the start of the pandemic, while the economy has seen a record contraction.

Figures from the Office for National Statistics showed that employment fell by 220,000 in April and June alone – the largest quarterly drop in more than a decade – and a further 81,000 in July.

The number of pandemic job losses since March totals 730,000, while the number of weekly hours of work has fallen by a record 203.3 million from 191.3 million hours in the first quarter of 2020 to 849.3m in the second quarter.

Quarter two also saw a record contraction in the economy of 20.4% – the worst economic performance in Europe – and the impact of the recession is expected to be keenly felt in the following months.

Although job vacancies rose 40% in July, one in three companies told the Chartered Institute of Personnel and Development (CIPD) that they plan to make staff cuts by September, while pay growth was expected to be slow.

What’s more, Gerwyn Davies, Senior Labour Market Adviser, at the CIPD warned that redundancies are not the main driver of falling employment, but rather a slowdown in recruitment.

“A real concern is that this is just the first wave of bad news for the jobs market,” he said.

“The fact that reduced hiring rather than increased firing of permanent staff is the main cause of the jobs slowdown to-date bodes ill for the coming months if more employers turn to redundancies as a last resort.”