UK unemployment rate drops to 5%

Unemployment levels in the UK fell back to 5% in the three months to January 2021, according to the Office of National Statistics (ONS).

The ONS confirmed that the unemployment rate decreased from 5.1% in December 2020, despite economists predicting it would increase to 5.2%.

The unemployment rate measures the amount of economically active people who are out of work and actively seeking employment.

The latest figure is just 0.1% lower than the period between October and December 2020, which the ONS attributes to tougher lockdown measures being reintroduced.

Commenting on the statistics, Tej Parikh, chief economist at the Institute of Directors, said:

“The labour market is showing some signs of resilience in the face of COVID-19.

"The pandemic has led to an unprecedented rise in job losses, but with continued support from the furlough scheme and the economy now gradually reopening, worst case scenarios are now slowly coming off the table.

“Unemployment will continue to edge up over the year, as cashflow remains challenging, but it is likely to peak lower than expected when the pandemic first took hold.”

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