UK redundancies hit record before second Covid lockdown

The government’s furlough scheme and a recovering economy failed to prevent record redundancies in the period before tougher lockdown restrictions were imposed, according to the latest official data.

Figures from the Office for National Statistics showed that a record 314,000 people lost their job in the three months to September – a period in which the Treasury’s wage subsidy scheme became less generous.

The ONS said the 181,000 quarterly increase in redundancies was unprecedented and helped push up the UK unemployment rate from 4.1% to 4.8% between the second and third quarters of 2020. Between August and September, the unemployment rate jumped by 0.3 points.

UK unemployment rate jumps to 4.8% as redundancies hit record high – business live

Flash estimates of the state of the labour market in October suggested there was a further 33,000 drop in the number of employees on payrolls, leaving headcounts 782,000 lower than they were when the Covid-19 crisis began in March.

The gradual opening up of the economy in the summer meant the number of job vacancies rose by 146,000 over the three months to October to 525,000, but the total was down by 278,000 on a year earlier.

The UK chancellor, Rishi Sunak, said: “Today’s figures underline the scale of the challenge we’re facing. I know that this is a tough time for those who have sadly already lost their jobs, and I want to reassure anyone that is worried about the coming winter months that we will continue to support those affected and protect the lives and livelihoods of people across this country.”

Sunak said the government’s decision to extend the furlough scheme until March in response to the reimposition of lockdown restrictions in England would “protect millions of jobs across the UK and support people to continue to provide for their families”.

The ONS’s labour force survey showed a 164,000 decline in employment in the three months to September – bigger than the City had been expecting. Unemployment on this measure rose from 1.52 million to 1.62 million, while experimental ONS data found by the final week of September the unemployment rate had climbed to 5.1%.

Jonathan Athow, the ONS deputy national statistician for economic statistics, said: “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.”

Ruth Gregory, a UK economist at Capital Economics, said further increases in unemployment were in prospect, predicting that the jobless rate would peak at 9% following the end of the furlough scheme next spring.

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