UK unemployment rate rises to 4.9% as redundancies hit record high

Britain’s unemployment rate rose to 4.9 per cent in three months to October and redundancies hit a record high as companies were hit by a fresh round of coronavirus restrictions. The number of people out of work rose to 1.69 million – the highest level in more than four years – from 1.62 million, or 4.8 per cent of the workforce, in September . While redundancies reached a new high, the rate decreased in October itself, according to data from the Office for National Statistics. UK finance minister Rishi Sunak said the government has provided more than £280 billion ($374bn) in support since the start of the Covid-19 outbreak, protected nine million jobs through the furlough scheme and supported millions of businesses through loans, grants and tax cuts. "But we know that, sadly, many people are already facing unemployment,” he said in statement on Tuesday. The government was forced to extend its job subsidies furlough scheme beyond the original October 31 deadline after the number of coronavirus cases began to escalate and new curbs were imposed on regions across the country. Matthew Percival, the director of people and skills at the Confederation of British Industry, said the “bleak” figures for October show households were being hit hard even ahead of England’s second national lockdown. “While news of a vaccine has provided hope, many firms are still finding it difficult to operate within the toughest Covid restrictions,” he said. “With millions more expected to be living under the toughest tier before the end of the week, the government must continue to do what it can to help businesses get through winter.” Britain's economy, which was hammered by the first lockdown – contracting 19.8 per cent in the second quarter – now faces the risk of further shock from the end of its post-Brexit transition period on December 31. The Bank of England has forecast that the unemployment rate is likely to peak at almost 8 per cent in the second quarter of 2021. However, Ruth Gregory, senior UK economist at Capital Economics, expects the figure to top out at 7 per cent on the back of the vaccine and drop down to 4 per cent by 2023. Hospitality was the worst hit sector in October, accounting for a third of the job losses, followed by retail, according to the ONS. The November data is unlikely to be positive either, as bars and restaurants in England were closed during the second lockdown, and thousands based in areas covered by Tier 3 rules remain closed. Tax office figures, which show the number of staff on company payrolls, slipped by a monthly 28,000 in November, taking the total number of job losses since February to 819,000, with a third of those in hospitality. Job vacancies rose to 547,000 in the three months to November, about 60 per cent higher than during the depths of the pandemic slump, but down by about a third from a year earlier. Arcadia fashion group fell into administration last month putting more than 13,000 jobs at risk, while retail chain Debenhams is closing all its stores, jeopardising 12,000 jobs . While the extension of the furlough scheme will offer a lifeline for many jobs over the winter, Ms Gregory said the vaccine “won’t come soon enough to hold back the tide of job losses in the coming months", because restrictions remain in place and the government will withdraw its support for the labour market. On a more positive note, however, the rate of average earnings growth rose to 2.7 per cent in the three months ended October 31, from 1.4 per cent in September. “This partly reflects those workers who came off the furlough scheme and kept their jobs going from receiving 80 per cent of their salaries on the furlough to 100 per cent,” said Ms Gregory.

UK unemployment rate rises to 4.9% as redundancies hit record high

Number of people out of work climbs to 1.69 million – the highest level in more than four years