Unemployment in the UK has reached the highest level for more than four years as the second wave of the coronavirus pandemic and tougher lockdown measures place more pressure on businesses and workers.
The Office for National Statistics said the unemployment rate rose to 5% in the three months to the end of November – representing more than 1.7 million people – from 4.9% in the three months to the end of October, reaching the highest level since April 2016. Unemployment was 4% in February before the pandemic struck.
In a snapshot of the jobs market during the second English lockdown and as tough restrictions were imposed in Scotland, Wales and Northern Ireland to limit the spread of Covid-19, the ONS said redundancies hit a record high during the quarter.
However, weekly figures indicated the number of people being made redundant had started to ease slightly from a peak in September, as the jobs market showed signs of stabilising after worse damage earlier in the pandemic.
The government extended the furlough scheme at the last-minute before the second English lockdown, despite repeatedly committing to close the flagship wage subsidy programme at the end of October. Amid persistently high Covid infections and tougher restrictions, the number of jobs being furlough has doubled to about 5 million since November from the level in October, while Rishi Sunak has further extended the scheme until the end of April.
However, the chancellor is coming under pressure to provide further support as the unemployment rate continues to rise, including scrapping plans to cut a £20-a-week uplift in universal credit benefits launched last year at the start of the crisis, which is due to be removed in March.
Responding to the unemployment figures on Tuesday, Sunak said: “This crisis has gone on far longer than any of us hoped – and every job lost as a result is a tragedy. While the NHS is working hard to protect people with the vaccine we’re throwing everything we’ve got at supporting businesses, individuals and families.”
The latest figures from the ONS showed the number of people claiming unemployment-related benefits has shot up to more than 2.6 million, a rise of 113% since March last year, as the pandemic plunges people out of work and reduces opportunities for finding a new job.
Separate figures from HMRC for December, which offer an earlier snapshot of the jobs market than the official ONS figures, showed there were 828,000 fewer employees on company payrolls in December than in February, before the crisis hit.