How’s UK Unemployment Rate And Why It’s Critical To Track It

Brett Alegre-Wood
September 11, 2020

Why is it important to track the unemployment rate in the uK? 

The unemployment rate is a key metric to look at for UK economic recovery. If we keep it low we are likely to recover fast, screw it up and we will have a double dip.

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Let's start off with unemployment because for me I think unemployment is one of the key metrics that you want to be looking at if we keep the unemployment low then actually we are likely to recover. If we screw it up and we get a high unemployment rate, lots of redundancies, lots of things happening like people losing their jobs then we're likely to double dip. We're likely to continue and you know into a drop. So I think that really is for me the biggest determination.

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We can go on government debt, we can say you know there's so much government debt the reality is if you look at the US they are leading the way in spending and printing money. And you know they've got away with it for a whole decade in actual fact they've got away with it for a long long time. Now they are the reserve currency but a lot of countries now are seeing that they can print money and it doesn't have this thing in the tail that we know perhaps thought it was. 

I know when I learned economics you know it was pretty much if you print too much money you end up with hyperinflation. But that was back in the 80s when I was learning you know probably eight yeah it was 80s you know it's back in the 80s when I was learning my economics you know Economics101. 

Basically things have changed a lot, our understanding has changed a lot. The fundamentals still remain the same but we've you know we've got a lot more advanced in our understanding of that.

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Look at the current rate interestingly 3.9 and I think the other thing is 3.9 there but that 3.9 yeah hasn't really changed. Now why is that? well to June it hasn't changed that's because the furlough scheme perhaps kept a lot of people. You know jobs were being created, less jobs were getting let go so because of that scheme a lot of people kept their jobs and that's why the lockdown was actually a relatively positive experience unless it was a really negative experience and you did lose your job. 

It hasn't really come to fruition yet we're going to see what happens now in July and August now that you've got to pay the NI and Pay-As-You-Earn elements and then another 10% and 20% to see what happens. 

If we look a bit further into it okay you know coronavirus 300,000 redundancies planned in June and July now this article the reason they can say this is because what happens in the UK if you have over 20 redundancies you have to report it to the government. So you can see 300,000 redundancies that's a big hit. And you know this is under 20 so how many businesses that have under 20 staff and maybe getting rid of 5, 10 or whatever who knows. We can look at that and that really can skew things. If we look at planned redundancies you can see they've jumped up. You know that's 2019  and 2020 so you can see I mean this year obviously they're going to be bigger.

Look guys so that's you know redundancy so the the issue is unemployment rate hasn't hit yet redundancies are being talked about we haven't actually seen them come to fruition yet as more data comes out we'll start to see and that will give us a you know a better indication of where we're at and how well it's recovered.

Video Transcription

Let's start off with unemployment because for me I think unemployment is one of the key metrics that you want to be looking at if we keep the unemployment low then actually we are likely to recover. If we screw it up and we get a high unemployment rate, lots of redundancies, lots of things happening like people losing their jobs then we're likely to double dip. We're likely to continue and you know into a drop. So I think that really is for me the biggest determination. We can go on government debt, we can say you know there's so much government debt the reality is if you look at the US they are leading the way in spending and printing money. And you know they've got away with it for a whole decade in actual fact they've got away with it for a long long time. Now they are the reserve currency but a lot of countries now are seeing that they can print money and it doesn't have this thing in the tail that we know perhaps thought it was. I know when I learned economics you know it was pretty much if you print too much money you end up with hyperinflation. But that was back in the 80s when I was learning you know probably eight yeah it was 80s you know it's back in the 80s when I was learning my economics you know Economics101. Basically things have changed a lot, our understanding has changed a lot. The fundamentals still remain the same but we've you know we've got a lot more advanced in our understanding of that. Look at the current rate interestingly 3.9 and I think the other thing is 3.9 there but that 3.9 yeah hasn't really changed. Now why is that? well to June it hasn't changed that's because the furlough scheme perhaps kept a lot of people. You know jobs were being created, less jobs were getting let go so because of that scheme a lot of people kept their jobs and that's why the lockdown was actually a relatively positive experience unless it was a really negative experience and you did lose your job. It hasn't really come to fruition yet we're going to see what happens now in July and August now that you've got to pay the NI and Pay-As-You-Earn elements and then another 10% and 20% to see what happens. If we look a bit further into it okay you know coronavirus 300,000 redundancies planned in June and July now this article the reason they can say this is because what happens in the UK if you have over 20 redundancies you have to report it to the government. So you can see 300,000 redundancies that's a big hit. And you know this is under 20 so how many businesses that have under 20 staff and maybe getting rid of 5, 10 or whatever who knows. We can look at that and that really can skew things. If we look at planned redundancies you can see they've jumped up. You know that's 2019  and 2020 so you can see I mean this year obviously they're going to be bigger. Look guys so that's you know redundancy so the the issue is unemployment rate hasn't hit yet redundancies are being talked about we haven't actually seen them come to fruition yet as more data comes out we'll start to see and that will give us a you know a better indication of where we're at and how well it's recovered.


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