UK: unemployment still resists rising in Apr-20
- The unemployment rate remained at 3.9% in April, contrary to all expectations, including my forecast from the consensus’ bullish fringe. The UR is now over 2pp below the BoE’s embarrassingly wayward nowcast from May.- Furlough has caused a collapse in hours worked rather than employment, with wages also depressed to a lesser extent. I am still much less pessimistic on Q2 but expect the UR peak to occur in Q3 as support rolls off.
- Universal credit determinations are still trending down. An ongoing emphasis on the cumulative excess claims exaggerates the size of the shock, with biased reportage helping to damp the relevance of less-bleak coincident data.
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