LONDON (AFP) – Britain’s unemployment rate dipped slightly in the three months to the end of February, official data showed yesterday, but analysts warned it could climb again once the government removes pandemic support for jobs.
At 4.9 per cent, the proportion of people out of work remained close to multi-year highs, but fell slightly from 5.0 per cent in the three months to the end of January, the Office for National Statistics (ONS) said in a statement.
While joblessness was 0.1 percentage points lower than the previous quarter, it was 0.9 percentage points higher than a year earlier, the ONS said.
It had already dipped from a near five-year high of 5.1 per cent in the final calendar quarter of last year.
Analysts expect the rate to shoot higher again however once the government removes its jobs support package paying the bulk of wages for millions of private-sector workers during the pandemic.
“The slight fall in the unemployment rate in February suggests that the government’s job furlough scheme is still insulating the labour market from the worst effects of the pandemic,” noted economist Thomas Pugh at Capital Economics research group.
“We still expect the unemployment rate to rise to a peak of 6.0 per cent by early 2022, but that would be a much better result than most feared only a few months ago.”
Following the latest data, British Finance Minister Rishi Sunak said “protecting jobs and the economy has been my main focus since this pandemic began” with 11.2 million workers furloughed.
The government recently began lifting strict lockdown restrictions, allowing people to once more enter clothes shops, eat in outdoor areas belonging to restaurants, get their hair cut in salons and visit gyms.
Britain’s economy, meanwhile, rebounded in February despite coronavirus curbs, sparking optimism over the outlook, recent official data showed.
Gross domestic product rose by 0.4 per cent in February after shrinking by 2.2 per cent in January amid the country’s vaccine rollout.