UK inflation falls sharply in April to 0.8%

Daniel Fowler
May 20, 2020

The Office for National Statistics (ONS) said that jobless claims under Universal Credit surged by a record 856,000 to 2.1 million in April, compared with the previous month.

The bank in March lowered its benchmark interest rate to an all-time low of 0.1% and dramatically increased asset purchases.

The total number of people claiming unemployment benefit soared to 2.1 million last month, the first full month of COVID-19 lockdown restrictions which were imposed by Prime Minister Boris Johnson on March 23.

The number of unemployment claims reveals only a fraction of the scale of the economic crisis, as it does not include those who do not qualify for government assistance or those taking advantage of the government's employment furlough scheme, probably over seven and a half million people.

Tej Parikh, chief economist at the Institute of Directors, said the government's wage subsidy scheme was holding off some job losses for now but it was not clear how firms would react when they are required to help fund it from August.

"These shocking figures would be far worse were it not the Job Retention Scheme, which has so far protected 7.5 million jobs".

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Vacancies fell by the most on record in the February-April period with hospitality job openings dropping the most.

Separate figures, based on data collected by HM Revenue & Customs showed the number of paid employees fell by 457,000 between March and April, a decline of 1.6%.

The claimant count for the month of April increased by 5.8 percent, from 3.5 percent a month ago.

Return to work after furlough won't be simple, expert warns At the same time, the number of job vacancies also fell dramatically, with the empty posts in the three months to April diving by 170,000 to 637,000, compared to the previous quarter.

Other headline unemployment figures from the ONS are released with a time-lag however, covering only the three months to the end of March.

Growth in pay slowed but employment expanded by a much stronger-than-expected 211,000. However, it is thought that many of these roles will not resume after lockdown meaning that the unemployment rate will be even higher. The Bank of England has warned that Britain may be on its way to the largest economic slump in over 300 years.

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