Unemployment rose to 4.8 per cent in the three months to September, an increase from 4.5 per cent, as coronavirus continued to hit the jobs market, according to the Office of National Statistics.
Redundancies rose to a record high of 314,000 in the same period as firms made more workers redundant in anticipation of the end of the furlough scheme, which was originally supposed to finish at the end of October.
It has now been extended until the end of March.
But for many, the extension came too late to save some jobs and experts predict further big rises in unemployment in the coming months.
Rob Marshall, managing director of employee benefits platform, WorkLife, said: “More than three quarters of a million people have lost their jobs between March, when the first lockdown began, and October. The record number of 314,000 redundancies means that many of these jobs will be lost for good.
“These figures show the terrible toll the Coronavirus pandemic has had on Britain’s workers. And while news of a possible vaccine has injected some optimism into the outlook, this doesn’t provide new jobs in the short-term.
The extension of the furlough scheme is welcome as it has given directors certainty to plan ahead. Unfortunately, the change appears to have come too late in the day for some
“While there is still so much uncertainty in the economy, we need to redouble efforts to support those employees still in work and the businesses employing them. Employers can help by offering financial and mental well-being support to their workers, many of whom will feel anxiety over continued job security in the face of fresh lockdowns across the UK.”
Tej Parikh, Chief Economist at the Institute of Directors, said: “The pandemic continues to bring turbulence to the UK labour market.
“In the Autumn, employers faced difficult decisions around retaining staff as government support looked set to decline. The initial shape of the Jobs Support Scheme, originally expected to come into force this month, didn’t provide a smooth off-ramp from furlough.
“The extension of the furlough scheme through to March is welcome as it has given directors certainty to plan ahead for their staff. Unfortunately, the change appears to have come too late in the day for some.
“The promising news about a potential vaccine means there is still hope the labour market can emerge from the pandemic in reasonable shape, with ongoing government support. In the meantime, restrictions are putting a heavy burden on businesses, as low demand and a legacy of costs from the outbreak add to the pressure. Cutting Employers’ National Insurance Contributions could buoy firms’ employment plans while encouraging job creation where business plans have shifted.”
Douglas Grant, Director of Conister, said: “The relatively low increase in unemployment over Q3 shows that the Government’s furlough scheme has been successful in mitigating some of the potential fallout from the pandemic.
“However, with redundancies reaching a record high over this period, it is clear that while the furlough scheme has been instrumental keeping many SMEs alive, not all businesses can or will be saved. The latest lockdown measures in England will sadly be the last nail in the coffin for many companies which simply cannot receive capital quickly enough.“
Sarah Hernon, Principal Consultant at the talent management organisation Right Management described the figures as “really worrying” and warned that employers, and their employees, have to be prepared for change.
“It is already a reality that restructuring may be required to realign business and talent strategies when economic realities or market demands change,” she said. “Additionally, the furlough scheme, although it has provided temporary support to many employees, has also created a large degree of uncertainty for both them and their employers.”
See the ONS figures here