Unemployment in the UK has soared to its highest level in more than three years amid fears that millions more people will be in line by Christmas.
The number of unemployed rose in the three months to August compared to the previous quarter by 138,000 to 1.52 million – the highest value since 2017. The unemployment rate rose from 4.1 percent in the previous three months to 4.5 percent.
The Office for National Statistics added that the number of employees in the UK fell by 673,000 between March and September, despite increasing by 20,000 last month.
The FTSE 100 index of UK leading companies fell 0.6 percent, or 35 points, to 5,967 today after the news, adding to concerns about the economic impact of new coronavirus-led business restrictions.
These graphs from the Office of National Statistics show how the unemployment rate is rising and the employment rate is falling
Redundancies rose by a record 114,000 in the quarter – between June through August 2005 and June through August 2020
This graph shows how the UK workforce has decreased in recent months, after having increased several years earlier
The total number of hours worked has remained low since the coronavirus crisis erupted but is now showing signs of recovery
ONS Assistant National Statistician Jonathan Athow said: “Since the pandemic began, the number of unemployed and job seekers has risen sharply, but more and more people tell us that they are not actively looking for work.
"There has also been a sharp increase in the number of people recently laid off."
Experts warned that unemployment will continue to rise when the government's vacation program comes to an end. Companies are required to contribute 10 percent to the program's staff costs in the past month.
The program will end on October 31st. There was a small dose of joy, however, as the data showed a sign of a recovery in vacancies, which rose a record high from 144,000 to 488,000 between July and September.
The growth in total employee wages including bonuses is unchanged compared to the previous year, which corresponds to a real decrease of 0.8 percent
The number of vacancies rose to a record level every quarter from July to September 2020, but is still 40.5 percent below the previous year's figure
The Bureau of National Statistics reported that the number of applicants in the UK has increased 120 percent since March 2020
This graph shows the impact of key data on labor market data sources during the coronavirus pandemic
Chancellor Rishi Sunak during a press conference at 10 Downing Street in Westminster last night
Even so, the vacancies are still below pre-coronavirus levels and 40.5 percent lower than a year earlier.
Analysis: Unemployment is rising, but the worst is yet to come
By SUSANNAH STREETER
The UK job market is already more precarious than forecast. Unemployment rose 4.5 percent in the three months to August to 1.52 million, the highest level in more than three years.
The worst is yet to come, however, as the mass vacation program won't end for a few weeks.
If the general subsidy is withdrawn, many thousands more people are expected to be laid off from their jobs in a difficult job search.
Although employers will still have access to government support under the new system, they will have to afford to pay part-time wages and that will not be easy as consumer demand remains depressed in many sectors.
The arts, entertainment and recreation sectors are expected to be particularly hard hit with 51 percent of workers on vacation and so many venues still closed.
The outlook for hospitality employment is also bleak, amid signs that bookings may slow down.
Although business in the restaurants, bars and hotels has increased significantly in the summer due to the Eat Out to Help Out program and the “Staycations”, new trade restrictions such as the 10pm curfew and new local closures have led to a decline in trade.
Research by the ONS shows that in recent weeks people have been less likely to leave the house to socialize and that the proportion of adults eating or drinking in a restaurant, café, bar or pub has decreased is.
Susannah Streeter is a Senior Investment and Market Analyst at Hargreaves Lansdown
According to the ONS, regular compensation excluding bonuses increased 0.8 percent in the three months to August, although average total compensation including bonuses remained unchanged.
Chancellor Rishi Sunak insisted that the government's employment plan would help protect employment and "ensure that no one is left without hope".
"I was honest with people from the start that unfortunately we cannot save every job," he said. “But these are not just statistics, they are people's lives.
"That is why it is my absolute priority to protect as many jobs as possible and to help those who are losing their jobs again."
But corporations and economists said they were prepared for the growing job losses despite the follow-up to support the chancellors.
Samuel Tombs, UK Chief Economist at Pantheon Macroeconomics, said: “The Job Support Scheme will do little to stem the tide of layoffs.
"We continue to assume that the overall unemployment rate will rise in the coming months."
Tej Parikh, Chief Economist at the Institute of Directors, said, “With the unwinding vacation program, cash-strapped companies have been forced to make difficult decisions about employee retention.
& # 39; Demand remains weak and as restrictions rise again, many companies will be overwhelmed with paying wage bills.
"The job support program may need to be improved if the government is to prevent unemployment from rising further."
Tom Pickersgill, managing director of Orka, which provides a platform for shift workers, said: “Almost a million people have lost their jobs since the pandemic began and, given the recent lockdown, that number could rise again in the coming months.
“While this is a terrible situation for so many, the picture of the job market is not entirely black and white and there are some opportunities out there.
"It will take time for permanent 9-5-style roles to recover to pre-Covid levels. However, we will also see an increase in temporary employment opportunities as companies prefer hiring flexibility."
And Rebecca McDonald, chief economist at the Joseph Rowntree Foundation, said, “With layoffs soaring before the national vacation program is fully implemented, today's numbers are a strong reminder that this crisis has a long way to go.
“This is not the time to do half measures: the government can still act quickly and decisively to prevent the wave of unemployment that will hit the poorest hardest.
"And those who have already lost their jobs should rely on a properly funded benefit system and be given the opportunity to acquire the skills they need to get back to work."