In this July 4, 2020 file photo, two women pass a sign welcoming people back to Manchester, England. Official figures released Tuesday, Sept. 15, 2020 show unemployment in the U.K. edged up in July even though large sections of the British economy reopened after the coronavirus lockdown, a clear signal that the jobless rate is set to spike sharply higher when a government salary-support scheme comes to an end in the autumn. (AP Photo/Jon Super, file)
LONDON (AP) — Unemployment in the U.K. edged up in July even though large sections of the economy reopened after the coronavirus lockdown, a signal that the jobless rate is set to spike higher when a government salary-support scheme ends in the autumn.
The 104,000 rise in the number of people unemployed during the three-month period to July took the total to 1.4 million, and raised the unemployment rate by 0.2 percentage points to 4.1% — the biggest increase since the pandemic began.
The rise in unemployment came even after the reopening of the hospitality sector in early July, following on from the reopening of shops selling items deemed as nonessential, such as clothes and books. The reopening of key sectors in the economy meant many people — thought to be around 2 million — could return to work following months at home.
To prevent an immediate spike in unemployment when the lockdown was announced, the government introduced the Job Retention Scheme, which saw it pay the bulk of the salary of people that firms kept on payroll rather than making them redundant.
Analysts worry that unemployment will start to rise more markedly in coming months as the package, which was used by more than a million companies to keep nearly 10 million employees on payroll, ends on Oct. 31.
The unemployment figures show that some firms have started laying off staff ahead of the program's end. The statistics agency said another 36,000 people fell off the payroll of private companies in August, taking the number to 695,000 since the imposition of the lockdown in March.
“The furlough scheme has been very effective in cushioning the blow from the pandemic to the labour market," said Debapratim De, senior economist at Deloitte. “But cracks are beginning to show, with unemployment rising, particularly among younger workers, and redundancies hitting their highest level in almost eight years.”
Most economists think the unemployment rate could more or less double by the end of the year to around 8%.
With many sectors of the economy unable to return to normal business because of ongoing social distancing requirements, and parts of the country in localized lockdowns, there are calls for the government to provide additional support when the so-called furlough program expires. Already, it has announced a bonus for those employers keeping workers on.
Frances O'Grady, the general secretary of the umbrella Trades Union Congress, urged the government to “act now” to protect and create jobs.
“That means building on the furlough scheme by setting up a new job retention and upskilling deal, to keep people employed at firms that have a viable future," she said.
Follow AP coverage of the virus outbreak at https://apnews.com/VirusOutbreak and https://apnews.com/UnderstandingtheOutbreak
20 High-Yield Dividend Stocks that Could Ruin Your Retirement Portfolio
Almost everyone loves a company that pays strong dividends. Who doesn't like receiving a check every quarter for simply owning a stock--especially if that stock is paying you back 4%, 5% or even 10% of its share price in annual income each year?. In a world where 10-year treasuries are yielding just above 2%, it seems hard to go wrong when buying a stock that's yielding significantly above the going rates on fixed-income assets. Unfortunately, the market rarely offers a free lunch.
While high-yield stocks may have a lot of near-term attractiveness, those same high-yields can often signal significant danger ahead. In some cases, it might mean that the company's dividend will stop growing or won't grow as fast as it used to. Worse yet, the company could cut its dividend, reduce the income you receive from owning the stock and drive down the value of the shares that you own.
4%-plus yields might seem like an easy opportunity to boost the investment income you receive, but high-yield stocks can just as often be a track reading to snare unsuspecting investors. It's not always easy to tell the difference though.
This slideshow highlights 10 high-yield dividend stocks that are paying an unsustainably large percentage of their earnings in the form of a dividend. These companies are all paying out more than 100% of their earnings per share in the form of a dividend, a sign that the advertised high-yield probably won't last.
View the "20 High-Yield Dividend Stocks that Could Ruin Your Retirement Portfolio".