New lockdowns further hurt UK labor sector

Britain’s jobs data for October showed further weakening in the labor sector, hurt by lockdowns on the new wave of Covid-19 cases, with growing risk of a shock from the end of post-Brexit transition period on December 31, as trade negotiations remain locked.

Unemployment rose to 4.9% in October from 4.8% previous month, hitting the highest since mid-2016, with Bank of England’s forecast that the unemployment is likely to rise to 8% in the second quarter of 2021, darkening the outlook.

Redundancies jumped to a record high of 370,000 in three months to October, while extension of job retention scheme until the end of March next year was triggered by the second wave of Covid-19 which threatens of strong acceleration of job losses.

Data from tax office showed a drop of payrolls by 28,000 in November, totaling the job losses since February to 819,000, with one third being from hospitality sector.

UK jobless claims rose by 64,300 in November, compared to 29,800 drop in October and above forecasted increase of 50,000, adding to signals of growing crisis in the labor sector as strong rise in new coronavirus cases prompted the authorities to impose stricter measures across the country.