The looming Covid unemployment catastrophe

Just how widely is the economic pain from Covid-19 being felt? Still surprisingly little, according to the latest employment figures from the Office of National Statistics (ONS). The absence of an explosion in unemployment goes some way to explaining why the lockdowns and restrictions have been accepted so meekly by the population at large.

That said, unemployment is beginning to rise significantly now. There are now 819,000 fewer payroll employees compared with the start of the crisis in February. The employment rate stands at 75.2 per cent, 0.9 per cent down on a year ago, and the unemployment rate is 4.9 per cent, up 1.2 per cent. Still, this is pretty low by historic standards: unemployment peaked at eight per cent in 2011, following the 2008/09 recession, at ten per cent in 1993 and at 12 per cent in the early 1980s. Considering that the economy has shrunk by eight per cent this year, blowing previous recessions out of the water, employment has held up extraordinarily well – albeit at the cost of record government borrowing.