Unemployment dips ahead of furlough ending, but retail job numbers fall

Unemployment dipped in July as the economy reopened further, official data showed Tuesday, but the outlook remains clouded with the government's furlough jobs support scheme ending soon.

Unemployment dropped to 4.6 per cent in the three months to the end of July compared with 4.7 per cent in the second quarter, the Office for National Statistics (ONS) said in a statement.

Vacancies are meanwhile at a record high with certain sectors including road haulage and hospitality seriously affected by a shortage of staff owing to the virus outbreak and Brexit.

At the same time, the number of UK workers on payrolls has rebounded above pre-pandemic levels, the ONS added Tuesday.

The UK government's furlough scheme that has kept millions of private sector workers in jobs during the pandemic by paying the bulk of their wages ends on September 30.

"Job creation remained strong over the summer, but the winding down of the furlough scheme at the end of this month will result in the reversal of the... progress," Samuel Tombs, chief UK economist at Pantheon Macroeconomics said following the latest data.

The ONS figures show that the retail industry has lost 89,000 jobs when compared with Q2 2020, bringing the total to 3.015 million retail jobs in the UK.

Helen Dickinson, chief executive of the British Retail Consortium, said the decline in retail employment is reflected in the chronic shortage of key retail jobs such as HGV drivers and distribution centre staff.

“This has left some retailers facing supply chain challenges, resulting in some empty shelves. Retailers have responded by increasing pay for workers, particularly in essential logistics roles. However, to bridge the gap while new British workers are trained, the government must provide a temporary worker visa scheme for HGV drivers and find ways to address other worker shortages,” she added.

The government said last week it will simplify the procedure to qualify as a lorry driver to tackle widespread delivery problems hitting retail businesses.

It said it would make up to 50,000 extra driving test slots available per year and reduce the number of required elements.

Meanwhile, the number of furloughed workers continuing the fall in retail, with the latest figures showing 106,000 still on the government scheme.