London has become the unemployment capital of the UK as the pandemic continues to take its toll on workers and businesses in the city. This high rate is mostly due to the fact that 92.2% of Londoners work in service based jobs such as retail and hospitality.
The city’s unemployment rate hit 7.2 per cent in the three months to February 2021, according to new figures released by the Office of National Statistics (ONS). The study shows that London’s workforce decreased by 60,000 in the last three months of 2020. This was an increase of 2.7%, much higher than the rise in unemployment in other regions.
The Covid 19 pandemic has led to a mass exodus from the capital due to so many employees now working from home. This has had knock-on effects for the businesses that serve inner London communities and rely on footfall, such as restaurants, coffee shops, hairdressers and retail. This same issue has lead to many city centres across England becoming ghost towns.
The accountancy firm PwC reported that there still could be a fall of more than 300,000 people living in London by the end of 2021, ending decades of growth since the last annual drop in 1988
Catherine McGuiness, policy chair of the City of London Corporation, said “The big financial and professional services firms, or even the small ones, are doing perfectly well working remotely. It’s the supporting businesses that will struggle”.
Despite the government’s job support schemes for these vulnerable businesses many of them have been forced to close or make cuts in employee numbers.
Chancellor Rishi Sunak said: “Protecting jobs and the economy has been my main focus since this pandemic began – through the furlough scheme alone, we have protected 11.2 million jobs.
“As we progress on our roadmap to recovery, I will continue to put people at the heart of the Government’s response through our Plan for Jobs – supporting and creating jobs across the country.”
For the three months ending February 2021, the highest employment rate estimate in the UK was in the South East (78.4 per cent) and the lowest was in Northern Ireland (69 per cent).
However all regions saw a decrease in the employment rate compared with the same period last year, with Northern Ireland seeing the largest (down 3.5 per cent) and Yorkshire and The Humber with the smallest (0.1 per cent).