- 114,000 more payrolls lost in June
- Total losses from March to July reach 730,000
- Claimant count jumps to 2.69m
- UK unemployment rate remains steady
- Job vacancies pick up slightly
- FTSE 100 rises at open
- Why it’s time to end the furlough farrago
- Matthew Lynn: After the world’s worst Covid slump, the UK needs the swiftest recovery
- Sign up here for our daily business briefing newsletter
Another 114,000 Britons lost their jobs during July as signs of a virus-driven crisis in the UK’s labour market became increasingly apparent.
According to HMRC data, the number of Pay As You Earn payrolls – which exclude the self-employed – has dropped by 730,000 since March. Claims for income support also jumped, with 2.69m people now claiming either Jobseekers’ Allowance or certain unemployment-related versions of Universal Credit.
In a sign of slight hope, the number of job vacancies picked up slightly last month.
The UK suffered a record decrease in hours worked between April and June as vast swathes of the economy were left on pause, with the total dropping to its lowest level since 1994. Against economists’ expectations, the overall unemployment rate barely changed, despite the sharpest drop in labour force employment since the financial crisis.
Well that's all from us today, join us again in the morning.
Here's a quick recap of today's events:
Stock markets surged today on optimism that lawmakers in Washington will hammer out a new stimulus package for the crippled American economy.
European equities got an extra shot in the arm from economic surveys painting a brighter picture than had been feared for the area's recovery prospects.
Confidence among investors in Germany soared to its highest level in almost 17 years in August, according to the ZEW institute's monthly barometer.
About 40 minutes into the trading day the Dow Jones Industrial Average gained about 1pc to 28,066.00 and the broad-based S&P 500 rose 0.1pc to 3,364.73, retreating from an earlier surge.
The Nasdaq was down another 0.9pc to 10,873.64.
What to look forward to tomorrow:
Interim results: Admiral Group, Avast, Balfour Beatty, Capital & Counties, CLS, Hostelworld, Just Eat Takeaway.com, M&G, Spirax-Sarco
Economics: Q2 GDP, sector indices, trade balance (UK); industrial production (eurozone); inflation (US)
Dave Ramsden: “Bank will do more and faster QE if necessary”
The Bank of England will do more, faster quantitative easing if the economy slows again, deputy governor Dave Ramsden has said. My colleague Lizzy Burden writes:
"I'm confident we've still got significant headroom to do more QE if we saw a much weaker recovery," Mr Ramsden told The Times.
On Thursday, the Bank said it saw no immediate reason to drop into negative interest rate territory as it warned that unemployment is likely to almost double by the end of this year.
He added that the pace of gilt purchases under QE would accelerate if “we saw signs of [market] dysfunction” and the Bank had “significant headroom to do more QE” if the economy continued to struggle.
Nokia phone maker HMD raises $230m
The Finnish company which rescued Nokia’s ailing smartphone brand has raised $230m (£175m) from investors including Google.
The deal sees Google, whose Android software once helped cause usher in the decline of Nokia's original smartphone business, take an equity stake in HMD Global, which bought rights to the smartphone brand four years ago.
HMD Global has owned the Nokia Mobile brand since 2016 and releases phones including remakes of classic Nokia devices.
Nokia’s mobile phone division was sold to Microsoft in 2013, but the deal failed to ignite Microsoft’s smartphone ambitions. Within three years, it had sold the Nokia Mobile brand to HMD, a business set up by former Nokia executives.
Boeing reports no new orders for July
Boeing lost another 43 orders for its grounded 737 MAX planes last month, bringing the total cancellations for the jet this year to 398, while delivering only four of its other aircraft to customers.
Boeing also did not win any new orders in July and its cancellations include 35 previously scratched orders for the 737 MAX by AerCap Holdings and Kuwaiti aircraft leasing company Alafco.
Gamesys shares jump as profits double
Online gaming firm Gamesys said trading is ahead of expectations after a surge of activity in the first half of 2020.
PA has the details:
Shares leapt after gaming revenue more than doubled to £340m in the half-year to June 30, compared with £169.5m in the same period last year. It said adjusted earnings jumped by 75pc to £95m as a result.
The company said this was particularly driven by "exceptional" growth in China, as well as "strong growth in the UK".
It said its brands delivered 16pc revenue growth in the UK, which accelerated towards the end of the second quarter.
US stimulus hopes, Russia vaccine claims, push S&P 500 close to record highs
Michael Hewson of CMC Markets says: "It’s been an absolutely stellar session for markets in Europe today driven higher by hopes of a new US stimulus plan with President Trump’s recent executive orders being used as a starting point baseline, a possible capital gains tax cut, as well as reports of a new coronavirus vaccine, developed by Russian scientists, and which is expected to go into full production in September.
The airline and travel sector has been one of the main beneficiaries of the vaccine reports, with IAG, Norwegian Air and Carnival all pushing higher.
We’ve also seen broad based gains from the auto sector in Germany, after car sales in China surged for the fourth month in a row, with July seeing a gain of 16pc year on year, with electric vehicle sales rising 19%.
The FTSE 100 has also rallied strongly, hitting one week highs in the process, led by financials and oil and gas stocks, with the oil price pushing up close to its best levels since March, while airline stocks have also performed well on the back of possible progress on the vaccine front, with IAG leading the way.
Plus500 hikes dividend
Trading platform Plus500 has more than tripled its interim dividend after its profits were boosted by volatility in the global markets.
Shares in the FTSE 250 firm rose after it posted a pre-tax profit of $363.2m (£276.9m) for the six months to June 30, up from $63.9m profit for the same period last year.
The company said it saw revenues jump on the back of heightened volatility in unprecedented market conditions, as well as a consistent performance from its technology platform.
It therefore declared a dividend of 0.953 dollars (73p) per share and announced a major share buyback.
Deloitte acquires tech consultancy Keytree
Deloitte has struck a deal to acquire Keytree, a 400-employee technology consultancy, as it seeks to capitalise on the surge in clients upgrading their systems.
Michael O'Dwyer reports again:
Richard Houston, Deloitte’s chief executive in the UK, said the deal was an opportunity for his firm to meet increasing demand from businesses seeking help with the introduction of new technology.
He said: “We believe that beyond Covid-19, investment in technology will be a critical catalyst for the recovery of UK businesses. Being digitally-connected has never been more important.”
Keytree was founded in the UK in 2006 and also has offices in India, Spain, Australia and Canada.
It reported sales of almost £40m and a pre-tax profit of £2.4m for the 12 months to August 2019, Companies House filings show.
The firm advises on digital transformation projects, data analytics and robot technologies and will be folded into Deloitte’s enterprise technology division from October.
The terms of the deal were not disclosed but Dan McNamara and Tim Kyle, Keytree’s chief executive and managing director, respectively, will be among the Keytree staff who will become partners at Deloitte.
Prudential slashes dividend on plan to sell entire US business
Insurer Prudential cut its dividend as it announced plans to sell its cash generative US business beginning with a stock market flotation of a minority stake in the first half of next year.
My colleague Michael O'Dwyer reports:
The London headquartered firm will focus on growing in Asia and Africa after already spinning off its European business, M&G, in a £5.7bn float last year.
The move to completely divest Jackson Life, which sells annuities in the US, follows demands for a break up from activist investor Third Point Capital.
Prudential said that if it cannot get a float away next year due to market conditions, it plans to demerge Jackson and give its existing investors shares in the separated entity.
Analysts believe Jackson Life could fetch in the region of $5bn. Private equity firm Athene bought an 11.1pc stake this summer.
The FTSE 100 insurer cut its dividend to focus on reinvesting profits on growing further in Asia and Africa, hopes to capitalise on the rising demand for health insurance and savings products in Asia and Africa and hass.
Shareholders will receive an interim dividend of 5.37 cents per share instead of 12.28 cents they would have received under the previous dividend policy.
Pre-tax profits from continuing operations fell to $729m in the first six months of 2020, half of the profit reported in the same period a year earlier. Operating profit was more resilient, falling 3pc to $2.5bn.
Mike Wells, chief executive, refused to say whether Prudential had been pressured by the Chinese government to support a new Hong Kong national security law criminalising anti-government movements.
HSBC and Standard Chartered were criticised for supporting the law and accused of sacrificing civil rights “on the altar of bankers’ bonuses”.
US producer prices pick up
US producer prices – a measure of the amount paid ‘at the factory gate’ rose 0.6pc month-on-month in July, in a sign of stabilising demand.
The rise – which leaves prices down 0.4pc year-on-year – suggests manufacturers are gaining back some their purchasing power, after taking a heavy hit under lockdown.
With food and energy stripped out, prices rose 0.3pc compared to July 2019 – the first such rise in six months.
Used car sales halve in lockdown
Sales of secondhand cars have crashed despite demand from commuters seeking to avoid public transport.
My colleague Alan Tovey reports:
Just over 1m used cars changed hands in the second quarter of the year, down 48.9pc compared with the same period a year ago, according to the Society of Motor Manufacturers and Traders (SMMT).
The lockdown in late March froze the market for several months after what the trade body called a “bumper” January and February.
Dealerships in England were allowed to reopen their doors on June 1, with Wales and Scotland following soon after.
Online and telephone car sales in April were not enough to prevent a 74.5pc monthly drop, which improved in May, although the reopening of dealerships in June was not sufficient to reverse that month’s decline of 17.5pc.
Cineworld soars on takeover speculation
Following a sharp upwards shift yesterday, Cineworld shares completely took off this morning after a US judge at the weekend struck down a rule banning movie studios from owning cinemas – raising the possibility of a takeover bid for some of the group’s sites.
They rose as much as 64pc, and have since cooled down a little to trade about 34pc up. Despite that jump, shares are still down by about 75pc this year.
EU worker in UK falls to five-year low
A good spot in today’s data from Bloomberg: the number of EU workers in the UK fell to its lowest level since 2015 in the most second quarter of the year.
The number of EU nationals working in Britain dropped 284,000 as the economy was thrown into crisis conditions.
While the latest decline is due to the coronavirus, it comes amid heightened uncertainty for EU citizens since the UK left the bloc this year.
A transition period that retains free movement of people for now will expire at the end of December. With talks on a trade deal making glacial progress, the British economy could be headed for another shock.
EU citizens make up a greater proportion of staff in Britain’s accommodation and food services than any other industry, and have seen that sector among the hardest hit by a pandemic that shuttered many businesses and prevented people from traveling.
Stilton drives wedge between UK and Japanese trade negotiators
Stilton cheese has caused a stink in trade negotiations between the UK and Japan as the Government tries to strike one of the fastest trade deals in history.
My colleague Simon Foy reports:
Both sides came close to reaching an agreement last week, but Trade Secretary Liz Truss has brought British blue cheese into negotiations in the hope of winning a better deal for UK food, the Financial Times reported.
The two negotiating teams have scrambled to agree a post-Brexit accord after Japan gave the Government just six weeks to finalise a deal in June.
At the time, Tokyo’s chief negotiator, Hiroshi Matsuura, warned that both sides would need to "limit their ambitions" as there was little time for talks on contentious areas such as tariffs and quotas.
However, talks have now reportedly stalled after Ms Truss decided to hold out for a better deal to promote British agricultural exports and show that the UK can secure a better deal with Japan than the one obtained by the EU.
Where job cuts have occurred
Debenhams to cut a further 2,500 jobs – Guardian
Department store Debenhams plans to cut a further 2,500 jobs after Covid-19 forced it to cut costs, the Guardian reports.
The beleaguered retailer is reducing the number of shop assistants in its stores as trading remains slow despite the reopening of 124 of its stores after lockdown.
It is understood to be scrapping the roles of sales manager, visual merchandise manager and selling support manager as part of the restructure.
The 242-year-old retailer said the reopened stores were trading ahead of management expectations but it still needed to cut costs. “The trading environment is clearly a long way from returning to normal and we have to ensure our store costs are aligned with realistic expectations,” Debenhams said in a statement.
Bellway sales still below 2019 levels
Sales for housebuilder Bellway remained under pressure during July down 14pc on last year amid generally softer summer levels.
Private reservations stood at 140 per week, compared to July 2019’s 162. In a trading statement, the FTSE 250 group said demand was growing, supported by Help to Buy.
All of its sales outlets have reopened, and nearly all its staff have returned to work.
Jason Honeyman, its chief executive, said:
Whilst the economic outlook is uncertain, sales demand is encouraging, and the Group has built a strong forward sales position. With our resilient balance sheet, we will proceed cautiously along the road to recovery, determined to return the group to its strategy of delivering long-term and sustainable growth.
The group’s total completion in the year ending July 31st stood at 7,522, down 31pc on the previous year.
Liberum’s Marcus Cole said the update showed Bellway’s trading has “significantly improved” since its last update in June. He added:
The shares look good value… given its proven track record, strong financial position and good exposure to the strongest parts of the housing market.
Here are some of the day’s top stories from Technology Intelligence team:
- Tim Cook becomes a billionaire as Apple nears $2 trillion valuation: Apple boss Tim Cook has achieved billionaire status as the iPhone maker comes within striking distance of becoming the first ever US company to hit a $2 trillion (£1.53 trillion) valuation.
- Losses at Revolut more than triple to £106m: Losses at digital banking start-up Revolut rose to £106.5m in 2019, from £32.9m in 2018, as the business continued to expand internationally and hired nearly 2,000 new employees.
- Demise of Big Tech ‘would pose serious risk to people’s privacy’: Breaking up big social media companies like Facebook would put billions of people’s personal information at serious risk, a leading Oxford think-tank has said.
More engine problems at Rolls-Royce
Rolls-Royce has been hit with a new set of problems after cracks were discovered inside the Trent XWB, the company's most important jet engine programme.
My colleague Alan Tovey reports:
Routine maintenance on some of the first engines used to power the twin-engine Airbus A350 revealed the issues.
The problems echoed troubles Rolls is having with another top-selling engine, the Trent 1000, used on Boeing’s 787 Dreamliner.
Multiple separate issues were found with the Trent 1000 that grounded the 787 while urgent inspections and repairs were carried out to the engines, landing Rolls with a £2.5bn bill for repairs, redesigns and compensation to airlines.
Troubles with the Trent 1000 included the risk of both engines shutting down in flight, and one engine suffered a partial disintegration as it took off from Rome.
- Read more: Rolls-Royce hit by more engine troubles
Booking data shows impact of voucher scheme
The headline figures on the Government’s Eat Out to Help Out scheme show its first-week popularity – something which appears to be carried out in OpenTable data.
The booking app’s own figures on seated diners show that levels were up year-on-year for the first time since lockdown on Monday, Tuesday and Wednesday last week.
The best day was Wednesday, when seated diner levels were up 20.5pc. Numbers have dipped again since then.
FSB: Furlough extension option must be kept open
The Federation of Small Businesses has called for the Government to keep its options open on the furlough front, including possibly extending the scheme the scheme beyond October.
Its chairman Mike Cherry said:
In light of today’s figures, the future of the Job Retention Scheme will need to be reviewed closely. The option of a meaningful extension to the furloughing initiative should be kept open, especially now local lockdowns are a fact of life and a meaningful second spike in coronavirus infections is possible…
It’s important to remember that these figures don’t capture the experience of all those who are suffering. Thousands of company directors are desperately trying to keep their operations afloat having received no help from the Government for months now. We urgently need to see the Treasury spell out how it intends to help those who’ve been left behind.
More than 10m meal discounts claimed in first three days of Eat Out to Help Out
Britons claimed discounts on 10.5m meals over the first three days of Eat Out to Help Out, the Government’s meal voucher scheme. The scheme, which will run from Monday–Wednesday throughout August, launched last week.
Given the scheme covers 50pc off, at a max value of up to £10 per diner, it looks like Britons aren’t squeezing the full possible value from the scheme.
Germans look to the future as present sentiment drops
Investors in Germany turned their sights further toward a strong recovery, despite a continued decline in current sentiment.
The ZEW research institute’s gauge measuring expectations for the next six months rose unexpectedly this month, while a measure of current conditions dipped further.
Its president, Achim Wambach, said:
Hopes for a speedy economic recovery have continued to grow, but the assessment of the situation is improving only slowly
While we wait for the latest Covid-19 spending to data to roll in, here are some of the day’s top stories from the Telegraph Money team:
- Best student bank accounts 2020: where to put your cash this academic year: Ahead of the new term starting in September, freshers can take advantage of the many incentives being offered by banks. This year offers include free railcards, subscriptions to streaming service Amazon Prime and interest-free overdrafts.
- Hargreaves makes millions in interest off savers’ cash while customers get nothing: The company said it received more than £91m in interest in the 12 months to June 30 just from cash sitting in investors’ accounts. It pays 0pc interest on cash to its customers across its Isas, pensions and trading accounts.
- Why it could be time to consider buying an ‘ethical’ fund: All investors should consider funds that meet "ethical" and "green" credentials, experts said, after British savers put more into such portfolios in the past four months than they did in the previous five years.
Here’s a quick wrap-up of some of the day’s top corporate stories (we’ll have further details later):
- Shares in InterContinental Hotels have risen after the group missed revenue estimates but reassured analysts with its liquidity. Revenue fell to $488m, down by 51pc compared to 2019, while it swung to a £275m loss before tax. Jefferies’ Stefano Bertolini said the FTSE 100 group’s steady cash levels reflect “the strong business model and recovering occupancy”.
- Gambling group GVC – owner of Ladbrokes Coral – is leading blue-chip risers, after US billionaire Barry Diller bought a $1bn stake in MGM, GVC’s US joint venture partner. Goodbody’s Gavin Kelleher said the investment represents “third-party vindication of the MGM/GVC JV opportunity”.
- Domino’s Pizza posted a slight fall in underlying profit as overall orders dropped and it took on extra costs related to safety measures. Deliveries rose 23pc over the first half of the year, but restaurant closures and new restrictions put a dampener on the overall figures.
Earnings growth continue to slow as furlough drags
Earnings growth continued to lose pace in the three months to June, continuing a year of downwards movements. It is now growing at a slower rate than inflation, the ONS says, with the latest fall driven by furloughing and bonus cuts.
The stats body said the CJRS has “dampened earnings growth”. Its latest Business Impact of Coronavirus Survey showed 56.1pc of businesses that had a proportion of their workforce furloughed in the last two weeks of June did not top up the CJRS payments.
DWP minister: We will build back stronger
Employment minister Mims Davies says today’s figures “show more of the impact the virus is having on both our economy and labour market”. Naturally, she’s taken the opportunity to talk up the Government’s latest stimulus efforts. She said:
Looking to the future, next month we’re launching the £2bn Kickstart scheme to create thousands of new high quality jobs for young people, increasing access to tailored job support by doubling the number of work coaches across the UK and we are boosting the DWP Flexible Support Fund by £150m to provide vital localised employment support. We are determined to build back stronger and support people as we move into recovery.
Of course, those numbers are pretty tiny compared to the mammoth cost of the CJRS – so it’s likely calls are going to continue for Rishi Sunak to pull out something bigger in the Autumn.
Resolution Foundation: Time for Gov to considers extra measures
Today’s labour data offers a mixed picture as Britain’s Covid-19 recovery shifts into a “new phase”, says the Resolution Foundation think tank.
Hiring has restarted from a near stop earlier in the year, but, with average hours still down 20 per cent in June, signs of improvement are few and far between.
Data for April to June reflects the lowest point of the crisis, when much of the economy was shuttered. Over 200 million fewer hours were worked between April and June than in the same period last year – a record fall of nearly 20 per cent.
It said the “relatively small” employment falls (in comparison to, say, the United States) “show how important the Job Retention Scheme [CJRS, the furlough scheme] has been in protecting jobs during this crisis”.
August will be crucial, it warns, with the CJRS changing this month so that employers have to contribute toward to the wages of furloughed staff. The RF said the Government now needs to “consider further measures for the sectors that will find it hardest to get back to work”.
Nye Cominetti, its senior economist, added:
Despite the easing of restrictions on economic activity through June and July, there is little good news in today’s labour market statistics…
The Government needs to heed these early indicators and extend support to those sectors and workers that are going to be hit hardest by the economic fallout of this crisis.
Employment reaction: A storm is coming
Today’s figures still don’t give us a clear sense of the looming catastrophe facing the UK’s labour market, warns Samuel Tombs from Pantheon Macroeconomics. He writes:
Underlying demand for labour remains much weaker than indicated by the latest official data. People still count as employed if they are temporarily away from a job and receiving no pay and if they are furloughed using the Coronavirus Job Retention Scheme. The ONS estimates that 7.5 million people – 27pc of employees – fell into these two categories in June. A wide range of indicators suggest that job losses will crystallise from August, when employers must start to cover some of the costs of furloughed staff.
He points out that the year-over-year drop in the official measure of job vacancies remains sharper than at the worst point in the last recession – indicating trouble ahead:
Bloomberg Intelligence’s Dan Hanson concurs. He writes:
The historically low unemployment rate continues to mask the underlying health of the jobs market. A sharp fall in employment and the subdued level of vacancies both suggest the labor market has taken a significant hit in recent months. We expect the true cost to be revealed once the government’s furlough scheme ends in October.
Employment falls more since financial crisis
Like unemployment, headline employment is a too lagged a measure to reflect the current economic turmoil. But the figures still show a slightly quarterly decline, which equates to a three-month labour force decrease of 220,000 people. That’s the largest drop since the financial crisis, but is somewhat better than the 300,000 drop analysts had expected.
These figures obviously seem disconnected from the experimental PAYE data. That may be a methodology quirk: a possible explanation for the discrepancy is that people who are away from work, not on furlough AND not being paid – but who believe they will return to their jobs – are still counted as employed for the purposes of labour force employment.
The ONS says:
- the estimated employment rate for all people was 76.4pc; this is 0.3 percentage points up on the year but 0.2 percentage points down on the quarter
- the estimated employment rate for men was 80.2pc; largely unchanged on the year and 0.3 percentage points down on the quarter
- the estimated employment rate for women was 72.8pc; this is 0.7 percentage points up on the year but 0.1 percentage points down on the quarter
Inflows and outflows fall as payrolls drop
Interestingly, the ONS notes that the drop in PAYE payrolls reflects both lower inflows and outflows, with the overall number of jobs being added and lost falling below pre-virus levels:
The impact may be even more severe. The ONS notes:
Testing of this experimental data indicates a tendency for both inflows and outflows to be revised downwards.
Food and accommodation shows signs of hiring rebound
Vacancy ratios in nearly every industry remain well below pre-virus levels, but food and accomodation is showing the strong sign of a rebound, the ONS says.
- the vacancies per 100 employee jobs ratio has increased to 1.2, after a record low of 1.1 in April to June 2020
- “accommodation and food service activities” is showing signs of recovery with vacancies per 100 employee jobs ratio increasing more than other industries after being one of lowest ratio by sector in April to June 2020
Vacancies rise slightly
Job vacancies rose slightly during July, pulling the three-month level to 0.37m and off the record low it reached between April and June. That’s an encouraging sign in terms of the UK’s recovery – but levels remain markedly low by historic and pre-virus standards.
The ONS said:
The increase is driven by small businesses (49 or fewer employees), some of which are reporting taking on staff to meet COVID-19 guidelines. Estimated vacancies for May to July 2020 are 274,000 fewer than in the previous quarter February to April 2020 (where the responses for the first two months are prior to the start of coronavirus social distancing measures) and 453,000 fewer than a year earlier.
Self-employed slowdown continues
Employment growth among the self-employed remained in reverse during June, with a record three-month decrease. That means self-employed employment growth was below the employees rate for the first time since 2015.
The ONS said:
Looking at the estimates for April to June 2020 by type of employment, the number of self-employed has shown a sharp fall, which is not reflected in employees. In particular, there were 28.02 million employees (85.1pc of all people in employment), 52,000 more than the previous quarter, and 4.76 million self-employed people (14.5pc of all people in employment), a record 238,000 fewer than the previous quarter.
Claimant count climbs again
The total claimant count – a combination of those claiming Jobseekers’ Allowance and some forms of Universal Credit – rose to 2.69m in July after a 94,000 monthly climb. That reverses June’s fall.
The ONS notes:
Enhancements to Universal Credit as part of the UK government’s response to the coronavirus mean that an increasing number of people became eligible for unemployment-related benefit support although still being in work.
Consequently, changes in the Claimant Count will not be wholly because of changes in the number of people who are not in work. We are not able to identify to what extent people who are employed or unemployed have affected the numbers.
Hours worked fall hits new record
In a sign of the heavy impact being dealt to the UK economy, hours worked fell by a record 191.3m between April and June, an 18.4pc decline.
The ONS says:
This was the largest quarterly decrease since estimates began in 1971, with total hours dropping to its lowest level since September to November 1994. Average actual weekly hours fell by a record 5.6 hours on the quarter to a record low of 25.8 hours.
Thus far in 2020, total actual weekly hours have fallen by 203.3m – the biggest annual decrease ever. The accommodation and food services sector has taken the biggest hit.
730,000 jobs lost since March
The ONS’s latest data shows 730,000 jobs have been lost since March, based on HMRC’s pay as you earn data. That is 114,000 more than in June (figures for which appear to have been slightly amended). The figures exclude the self-employed.
- The unemployment rate held steady at 3.9pc
- Jobless claims rose by 94,000 to 2.69m
Today’s labour market data: key points
Labour market data tends to be a little messy: mixing different months and measures to give the best possible picture of the country’s employment situation.
Last month’s release showed 650,000 PAYE jobs (so, excluding the self-employed) had been lost since March, when lockdown began.
The unemployment rate for June is expected to have risen slightly, from 3.9pc to 4.2pc. This would be the first solid upwards move in the level, which the Bank of England predicts will hit 7.5pc by the end of the year.
The level has remained low as a result of the furlough scheme, and a stipulation that in order to count as unemployed, a person must have applied for work in the previous month (which many may not have done due to the virus).
Another key metric will be hours worked, which dropped by the most on record between March and May 2020. The ONS uses these three-month measures for several data points: today’s release could show whether the April–June was worse than March–May in terms of the impact of working hours.
Agenda: Labour market data to show Covid-19 impact
Good morning. After a slow start to the week, labour market data released by the ONS today is set to show the unfolding jobs crisis that is beginning to impact Britain.
Although much of the data will appear out of date, experimental measures based on payroll changes should give a clearer picture of how many jobs have been lost since lockdown began.
5 things to start your day
1) Unilever warns that move to UK could be derailed by Dutch opposition push for €11bn ‘exit tax’: Unilever could scrap plans to abandon its Anglo-Dutch structure if MPs in the Netherlands pass a law forcing the company to pay an €11bn (£9.7bn) "departure tax"
2) Fears grow that Northern high streets will be hit hardest by retail collapse (ONS) as BRC and Barclaycard figures show bounce back is slowing: Fears are growing that the high streets in areas on the Government’s list for “levelling up” will be the hardest hit by the impact of Covid-19 on retail and the decline of offices.
3) TikTok runners and riders: who is in the race to buy the Chinese app?: Three years on from its failed Vine venture, Twitter has found itself in the running to buy TikTok, an app seen by many as a successor to Vine.
4) McDonald’s sues former boss Steve Easterbrook over alleged relationships with colleagues: McDonald's has gone public with accusations that its former chief executive in fact had three additional, physical sexual relationships with members of staff in the space of a year.
5) Beirut blast will almost double the depth of Lebanon’s recession: The Institute of International Finance (IIF) warned output will plunge by 24pc in 2020, a much deeper contraction than the 15pc predicted before the explosion rocked the capital.
What happened overnight
Shares advanced in Asia on Tuesday, extending another rally that took the S&P 500 to within striking distance of its all-time high set in February.
Japan's Nikkei 225 added 1.6pc and Hong Kong gained more than 2pc in early trading, even as the tally of confirmed new coronavirus cases worldwide topped 20 million, according to a tally by Johns Hopkins University.
The gains followed President Donald Trump's announcement over the weekend of stopgap moves to aid the economy, after talks on Capitol Hill for a bigger rescue package faltered.
Sentiment got an extra boost from signals that the talks might resume, and by Trump's suggestion to reporters that he is planning a capital gains tax cut and a tax reduction also for "middle income" earners.
The Hang Seng in Hong Kong added 2.1pc to 24,877.14, while the Nikkei 225 climbed to 22,686.53. In South Korea, the Kospi picked up 1.3pc to 2,418.91. Sydney's S&P/ASX 200 jumped 0.9pc to 6,167.10 and the Shanghai Composite index climbed 0.7pc to 3,402.44.
Coming up today
Derwent London, Domino’s Pizza, Gamesys, InterContinental Hotels, Petrofac, Prudential, Quilter
BRC retail sales, unemployment, average earnings (UK); ZEW sentiment (Germany)