The number on British company payrolls fell by over 600,000 in April and May as the COVID-19 lockdown hit the labor market, and vacancies plunged by the most on record.
The jobless rate unexpectedly held at 3.9 percent over the three months to April – despite a record slump in overall economic output during that period – as firms turned to the government’s job retention scheme to keep employees.
Economists had mostly expected a rise in the unemployment rate to 4.7 percent.
The furlough scheme is due to run until the end of October although employers have to make contributions to the cost of paying their temporarily laid-off workers from August.
Many companies have announced permanent layoffs of workers. UK airlines have shed more than 15,000 jobs.
Prime Minister Boris Johnson is reportedly considering increasing a tax incentive for small firms to hire workers, and suspending social security payments by employers.