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East Midlands Chamber News

Tougher lockdown restrictions in East Midlands is reason for high unemployment rate, says Chamber

Hospitality and retail accounted for 456,837 of 819,000 fewer people on payrolls in October

New figures published today by the Office for National Statistics (ONS) show the UK unemployment rate has risen to 4.9% nationally.

The figure for August to October 2020 is up from 4.8% in the three months to September as redundancies rose to a record high of 370,000 in the same period.

There were 1.7 million people out of work, with 819,00 fewer employees on payrolls compared to February.

For the first time, the ONS broke down these numbers by industry, with a decline of 297,000 workers in hospitality, followed by 160,000 in retail and wholesale, 115,000 in manufacturing, and 89,000 in culture and recreation.

East Midlands unemployment statistics

In the East Midlands, the unemployment rate for people aged 16 to 64 was 5.3% - four-tenths of a percentage point above the national average and the fourth highest region.

This represented a 0.7% increase in the unemployment rate compared to the period from May to July 2020.

Responding to the figures, East Midlands Chamber (Derbyshire, Nottinghamshire, Leicestershire) chief executive Scott Knowles said: “The rise in the unemployment rate and record number of redundancies provides further evidence that the damage being done to the UK jobs market by the pandemic is intensifying.

“The end of this period reflects the initial introduction of a tiered approach to lockdown restrictions, which forced many businesses to close or significantly reduce their operations.

“With more than half the people out of work nationally in hospitality and retail – the industries most affected by lockdown restrictions – it’s clear the East Midlands is well above the national average because we have been hit by local lockdowns more severely than many other regions.

“Leicester was the first city to be placed under local lockdown in June and has yet to come out of restrictions, while Nottinghamshire was among the first counties to be placed into Tier 3 measures. Since the end of the national lockdown – the impact of which isn’t covered in these figures – the entire East Midlands has been under the toughest restrictions, so it’s inevitable that this will have had a significant impact on jobs.

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“The results of our Quarterly Economic Survey reflect this. In the most recent survey for Q4, carried out in November, there was a decline in headcount over the preceding three months among a net 6% of East Midlands businesses that responded as cashflow and advanced orders have been a real issue throughout the year.

“However, there is some light at the end of the tunnel, with a net 16% expecting to increase their workforce over the next three months as firms prepare to continue investing in the new year.

“The reality, however, is that businesses are still navigating a minefield as the economy is brought to a virtual standstill. While a vaccine offers real hope in the future, mass testing remains crucial to getting our economy moving again in the meantime.

“Companies are also still in limbo as we await the outcome of trade negotiations between the UK and EU. Securing a trade deal is critically important to avoid a damaging cliff edge for our economy and, with time running out, Government must work urgently to close the major gaps in the guidance available to help businesses to prepare for the end of the transition period.”