KEY POINTS

  • Some 220,000 people in the U.K. lost their jobs between April and June
  • Under the furlough scheme, the government has paid up to 80% of workers’ monthly wages up to £2,500
  • In June alone some 140,000 layoffs were announced by British firms

Some 220,000 people in the U.K. lost their jobs between April and June – the largest such quarterly decline since May-July 2009 during the trough of the global financial crisis.

The Office for National Statistics, or ONS, also said  Tuesday that since March – the beginning of the COVID-19 pandemic – some 730,000 jobs have been lost in the U.K.

However, these figures exclude the millions of Britons who have been temporarily furloughed or are on temporary unpaid leave – these workers still count as being “employed.”

Under the furlough scheme, the government has paid up to 80% of workers’ monthly wages up to £2,500 ($3,277). However, the government has warned that companies themselves will have to carry a greater share of these costs.

“A large number of people are estimated to be temporarily away from work, including furloughed workers; approximately 7.5 million in June 2020 with over 3 million of these being away for three months or more,” ONS said.

The overall unemployment rate remained unchanged at 3.9% from the prior quarter -- largely reflecting the vast number of furloughed workers.

"The groups of people most affected [by joblessness] are younger workers, 24 and under, or older workers and those in more routine or less skilled jobs,” said Jonathan Athow, deputy national statistician at the ONS. "This is concerning, as it's harder for these groups to find a new job or get into a job as easily as other workers."

Chancellor of the Exchequer Rishi Sunak said of the report: "Today's labor market stats make it clear that our unprecedented support measures, including the furlough and self-employed support schemes, are working to safeguard millions of jobs and livelihoods that could otherwise have been lost."

But the Shadow Work and Pensions Secretary Jonathan Reynolds called it "extremely worrying" that older workers, the self-employed and part-time workers have borne the brunt of joblessness.

"[The] Labour [party] has repeatedly warned the government [that their one-size-fits-all approach will lead to job losses. These figures confirm what we feared – Britain is in the midst of a jobs crisis," Reynolds said.

Analysts expect a wave of job cuts in the coming months. In June alone some 140,000 layoffs were announced by British firms, BBC reported.

Ruth Gregory, senior U.K. economist at Capital Economics, called the jobs report "the lull before the storm” and that further increases in joblessness were "all but inevitable as the furlough scheme unwinds.”

"The cracks evident in the latest batch of labor market data are likely to soon turn into a chasm, with the unemployment rate rising from 3.9% to around 7% by mid-2021," she said.

Capital Economics predicted that the unemployment rate will remain above its pre-pandemic level of 4% through the end of 2022.

Jeremy Thomson-Cook, chief economist at Equals Money, said the actual number of jobless people is much higher than reported because official figures have been "very effectively lowered by the government's furlough scheme.”

"Unfortunately, the end of the furlough scheme will present a cliff-edge, statistically and economically, for those currently relying on government support to make up their wages," he warned.

Andy Verity, economics correspondent at BBC News, commented: “There is some less than awful news in the latest labor market figures. The number of [job] vacancies, for example, rose from its record low by 10% in May to July as lockdown restrictions were eased. The number of hours worked saw a record drop in the second quarter from April to June, but in July it was down by only 3%, less than half the fall in May and June.”

But Verity cautioned: “Unemployment tends to peak well after economic shocks have been and gone: this time will be no different.”