London : Official figures show UK unemployment continued to rise over the summer, with more than 1.5 million people jobless in the wake of the coronavirus crisis and the wind-down of the furlough scheme.
The UK unemployment rate rose from 4.1% between May and July to 4.5% between June and August, according to the Office for National Statistics (ONS) figures published on Tuesday. It marked a greater deterioration in the labour market than expected by analysts.
Redundancies have hit their highest level and had their biggest leap since the global financial crisis more than a decade ago, jumping by a record 114,000 on the previous quarter.
The figures are likely to heap pressure on the UK government amid warnings job cuts will continue, as its new job support scheme gives employers less help than the furlough scheme it is due to replace.
Samuel Tombs, chief UK economist at Pantheon Macroeconomics, and other economists had predicted the official unemployment rate would rise to 4.3%.
In a note before the latest figures were published, Tombs said the growing unemployment count likely reflected more people who had lost jobs earlier in the pandemic starting to look for work. Anyone without a job is not officially classed as unemployed unless they are actively looking for work, despite the bleak labour market discouraging job-hunting.
Tombs said some of the official figures, which have to meet internationally recognised criteria, “likely remained beset by sampling issues.”
He added: “A range of indicators point to a surge in redundancies last month, when firms had to start to make a 10% contribution to the costs of staff on the coronavirus job retention scheme.”
Some 6.4 million people are described as temporarily away from work between June and August, compared to between 2 and 2.5 million before the pandemic. It includes not only those on parental and annual leave, but also furloughed workers.
There were some positive signs in the data, however. The figures also show a record rise in total hours worked, following record declines earlier in the year, as lockdown restrictions eased over the summer. Meanwhile vacancies saw a record jump to reach 488,000 between July and September, after hitting record lows during the first national lockdown.
The number of staff on payrolled employment also rose by 20,000 between August and September after months of declines. Growth in regular employee pay, excluding bonuses, was positive between June and August, up 0.8%, though including bonuses it was flat year-on-year.
It comes after separate analysis released on Monday predicted 1.5 million more job cuts by Christmas, with the end of the furlough scheme this month blamed for forcing employers’ hand.
The Centre for Economic and Business Research (CEBR) expects unemployment to hit almost 3 million or 8.4% of the workforce — those in or looking for work — in the final quarter of the year.
Most of the cuts are expected to hit 1.2 million workers still on full or partial furlough leave, who are “waiting in vain to return to jobs that no longer exist.”
Another study published on Monday suggested even more jobs were at risk from the wind-down of the furlough scheme, warning 1.8 million “viable” roles could be lost.
The Institute for Public Policy Research (IPPR) argued there were flaws in the new job support scheme and the government’s job retention bonus, with employers only likely or able to gain help retaining one in 10 furloughed staff.
