Record spike in redundancies as UK unemployment rises to 4.8% amid coronavirus pandemic

Redundancies reached record high between July and September as 314,000 people lost their jobs, official figures show

Unemployment continued to rise ahead of the new national lockdown, with a record rise in redundancies between July and September.

The UK unemployment rate rose to 4.8 per cent from 4.5 per cent in the previous quarter, as Covid-19 continued to hurt the jobs market, official figures show.

The number of workers on payrolls dropped by 782,000 between March and October, including a fall of 33,000 last month, the Office for National Statistics (ONS) reported.

“July to September 2020 estimates show a large increase in the unemployment rate and a record number of redundancies, while the employment rate continues to fall,” the ONS said.

In the three months to September, redundancies reached a record high of 314,000. Young workers have borne the brunt of the job cuts with employment down by around 300,000 among 16- to 24-year-olds.

The official unemployment rate of 4.8 per cent was up 0.2 percentage points on the previous quarter and 0.9 percentage points on a year earlier. It remains relatively low by historic standards, partly because the furlough scheme has kept millions of people in employment.

The total number of weekly hours worked – considered to be a more accurate indication of the current state of the jobs market – came in at 925 million, down 127.6 million hours on the previous year but up a record 83.1 million hours compared with the previous quarter.

After sustained pressure and warnings about mass unemployment as a second wave arrived, the chancellor, Rishi Sunak, extended the furlough scheme, which pays up to 80 per cent of wages for hours not worked, until 31 March.

On Tuesday, Mr Sunak said the figures “underline the scale of the challenge we’re facing”.

“I want to reassure anyone that is worried about the coming winter months that we will continue to support those affected,” he said in a statement.

The number of people temporarily away from work soared to 7.9 million in April before dropping back to 3.9 million in September as businesses reopened and consumer spending increased. Before the pandemic, around 2-2.5 million were typically away from work at any one time, including  those on maternity or paternity leave and annual leave.

Around 2.5 million people, or 8 per cent of the workforce, were on furlough in mid-October, survey data indicate.  Arts, entertainment and recreation, and accommodation and food services, had the greatest proportion of workers on furlough, at 32 per cent and 27 per cent respectively.

There were some positive signs in the latest figures. Job vacancies continued to recover in August to October, with an estimated quarterly increase of 146,000 to 525,000, but they remain more than a third below the level seen a year ago. Average wages, excluding bonuses, increased at an annual rate of 1.9 per cent. 

However, the figures do not show the impact of new lockdown measures enforced across England from 5 November to 2 December.

Jonathan Athow, ONS deputy national statistician for economic statistics, said: “The latest monthly tax numbers show over three-quarters of a million fewer employees on the payroll in October than in March.

“Unemployment grew sharply in the three months to September, with many of those who lost their jobs earlier in the pandemic beginning to look for work again. The number of redundancies has also reached a record high.

“Vacancies continued to recover from the very low numbers seen earlier in the year. However, these figures predate the reintroduction of restrictions in many parts of the UK.”

Jonathan Reynolds, Labour’s shadow work and pensions secretary, said:  “The government’s failure to face up to the scale of this jobs crisis in time has cost people their livelihoods. Redundancies are at new record highs, and unemployment is rising.  

“We’ve had enough last-minute changes and bluster from this government. The chancellor needs to urgently provide support to those who have lost their jobs and get Britain back to work – including through a green recovery to help create hundreds of thousands of low-carbon jobs.”