UK Unemployment Drops as Government Extends Lockdown

Ibeth Rivero

According to the United Kingdom's Office for National Statistics, the unemployment rate stood at 4.7% for Q1 2021, in line with expectations and lower than the previous reading of 4.8%.

The number of unemployed people in the UK dropped by 92,600 in May, after dropping by 55,800 in April. This left the claimant count rate at 6.2% in May after being at 6.4% in April.

Average earnings including bonus rose 5.6% in Q1 2021, beating expectations of 4.9% after a 4.3% rise in Q1 2021. Excluding bonus average earnings rose 5.6% in April, beating expectations of 5.3% after climbing by 4.6% in Q1 2021.

According to the ONS, employment figures improved mainly because non-essential shops and hospitality venues have reopened. However, sectors like hospitality, tourism and the music industry continue to be affected by restrictions.

“If businesses have to stay closed or operate at massively reduced capacity they’re not going to be able to pay staff, rents, and loans back. Government support must recognize that,” commented Shadow Chancellor Rachel Reeves.

British Prime Minister Boris Johnson recently announced the extension of coronavirus restrictions by four more weeks. This implies that capacity restrictions for pubs, cinemas, and other public venues would remain, while nightclubs will remain closed.

Since the beginning of the pandemic, 4,573,419 COVID-19 cases have been reported in the UK as well as 127,907 total deaths. This makes the United Kingdom one of the most affected countries in Europe, only surpassed by Russia, with 5,236,593 cases and 127,180 total deaths, and France, with 5,741,354 reported cases and 110,454 total deaths.

The UK vaccination campaign recently accelerated as a response to the recent spread of the coronavirus delta variant, which comes from India. So far, 71.7 million doses have been distributed among the population, while 30 million people have been fully vaccinated, which accounts for about 45 percent of the population.

So far this week, the British pound dropped by 0.43% against the US dollar, closing Monday's session at the 1.4112 level. By 11:34 GMT, the pound dropped by 0.46% against the greenback, falling to the 1.4047 level.

Ibeth Rivero

Ibeth contributes daily market commentary in both English and Spanish (both of which she speaks fluently) and she also manages the DailyForex mobile app to ensure that traders around the world are getting important market updates in real time.

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