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UK unemployment edged higher before coronavirus crisis

Oscar Williams-Grut
·Senior City Correspondent, Yahoo Finance UK
·2-min read
General view of commuters crossing London Bridge, in central London, during the morning rush hour, as the Government's top scientist warned that up to 10,000 people in the UK are already infected with Covid-19. (Photo by Dominic Lipinski/PA Images via Getty Images)
Commuters crossing London Bridge, in central London. (Dominic Lipinski/PA/Getty Images)

New data shows the UK jobs market remained “strong” at the start of the year, despite a small uptick in unemployment.

The Office for National Statistics (ONS) said on Tuesday unemployment rose to 3.9% in the three months to January 2020, up from 3.8% in the prior period. Economists had expected the unemployment rate to remain steady and it marks the first annual increase since 2012.

Despite the slight rise, employment across the UK also rose by 0.8% to a record high of 32.9 million. The rise was driven by more women joining the workforce and finding employment. 134,000 women found jobs in this period, taking the total number of women employed in the UK to record high of 13.8 million.

“The performance of the UK labour market continues to be strong, with a record high employment level, declining economic inactivity and historically low unemployment,” the ONS said in a statement.

Median earnings in the UK rose by 3.7% to £1,850 ($2,260), the ONS said. That was well above inflation.

Read more: Stocks fall ahead of EU leaders’ coronavirus response

Crucially, however, the statistics date to before the spread of novel coronavirus, which has caused economic and social disruption worldwide. The period covered — November 2019 to January 2020 — was one when economic optimism was riding high thanks to the unexpectedly big victory for Boris Johnson in the December elections.

The ONS did not mention coronavirus or its possible impact, but lockdown measures introduced this week in the UK are likely to lead to an increase in unemployment. Airlines around the world have already begun laying off staff, while pubs and restaurants will struggle without support from the government.

“There’s more than a touch of Alice in Wonderland about these jobs figures,” said Pawel Adrjan, a UK economist at jobs site Indeed.

“They paint a broadly rosy, but now hopelessly outdated, picture of a labour market which is having to adapt to a completely new reality.”