The increased unemployment rate is one of the most concerning matters in the United Kingdom today. COVID-19 had a huge impact on employees all over the world and British workers are among those who still try to recover but without any real hope. The number of redundancies in the UK rises quickly as a result of the economic fallout from the pandemic and the government’s action plans support and drive up this growing number. Despite the attempts, it seems like the situation is not gonna change, and recently a Freedom of Information request by BBC revealed that the employers of the UK plan almost 500 000 redundancies. 

It’s hard to expect a solution while taking current news into account. As Financial Times reported, job redundancies jump by 114 000, and the number of out-of-work benefits rises to about 3 million. UK job losses rise fast, setting a new record in the last three months and as the experts believe, the worst is yet to come. Unemployment is going up and less and fewer people are taking part in the labor market which poses a huge threat to the UK economy. 

According to the Guardian, the number of such redundancies is the biggest jump since 1995. The unemployment rate has increased by 5% and as a result, self-employment rates rose. Considering the fact that things are unlikely to improve shortly and the renewed business rapidly closes down, at the end of the year the rates will be even higher, meaning that people have to find some alternative solutions to survive. And many of them already tried something different from the usual labor market. 

Possible alternative solutions

The deadly impact of the coronavirus pandemic put new issues in order and pushed unemployed people to think creatively and try something else. After the lockdown, self-employment is a new trend in the UK and the whole world. The only possible way to receive income while sitting at home restricted to continue your usual work is to become self-employed. 

One of the most common ways today to be self-employed is to become a freelancer. 

For example, being a professional marketer or copywriter in today’s world became so easy. YOu just have to take some online courses, learn the basic principles of this field and that’s it. If you have a variety of freelance skills, you can take part in SEO, data analytics, user experience, email marketing, and many more.

But being a freelance marketer isn’t everything. People are starting to take part in various freelance activities. For example, unsurprisingly, in today’s very volatile global economy, FX traders are feeling extremely confident with their trades and overtaking many other remote or self-employment opportunities. 2020 has seen the forex broker listings do nothing but expand due to increased interest and capital in this market. 

Also, during the pandemic atmosphere, one of the most in-demand jobs in the world is programming. In today’s digitized world every business and organization needs a strong online presence, which is why people are trying hard to learn the basic rules of programming and become self-employed. 

However, it doesn’t mean that the self-employed people haven’t been affected by the pandemic. In fact, the UK’s flexible workplace has already had the first wave of job cuts and it was focused mainly on the self-employed, temporary employees, and part-time workers. The UK's general drop in employment between June and August was 253 thousand and among them, 240 000 were self-employed people, 202 000 part-time workers, and 34 000 temporary workers. Also, the younger people have been affected and the unemployment rate for 16-24-year-old people is already at 13.4% in the United Kingdom.

How could it affect GBP?

The rate of the United Kingdom’s national currency, pound sterling is hugely dependent on unemployment. Generally speaking, low unemployment rates mean a strong economy and increased demand for the national currency because in that case, the investors believe that the economy of the country can be profitable for them. Therefore, they seek investment opportunities in the country and the value of currency increases.

 But since there is a relatively high unemployment rate in the United Kingdom, it’s likely to cause market volatility and economic instability. Apart from the pandemic, another important reason for these bad results is Brexit. Investors in the UK use the unemployment statistics to look at which sectors are losing jobs. As a result, they invest less in many important sectors, and it causes problems regarding GBP. 

Signs of hope

However, according to John Philpott who’s a director of The Jobs Economist, an independent consultancy, now we can already see some signs of improvement in Britain’s economy. As the second wave of coronavirus starts, people are returning to their old workplaces. For example, in September the number of workers on company payrolls increased by 20 000 which slightly reduced the total number of job losses since the start of the pandemic. For now, the situation may not significantly change but he believes that at the end of the year the United Kingdom will overcome this increased number of unemployment, and losing jobs on the labor market will finally come to an end.

Unfortunately, just a few experts share his opinion and general belief regarding job losses is not hopeful. British people are likely to see the unemployment rate rise towards 9-10% over the winter and this will definitely put additional pressure on the Bank of England to add stimulus to help boost the UK economy. In fact, BoG has already decided to take further steps and unveiled a 100 billion GDP stimulus package to face current economic challenges. Although there’s almost no sign of improvement, let’s hope that the British economy will escape suffering and there comes a time when falling in unemployment rates will finally come to an end.