11 Nov Coronavirus: Redundancies at record level as pandemic takes further toll | Business News
A record 314,000 redundancies were recorded in the three months to September as the coronavirus took a further toll on jobs.
Figures from the Office for National Statistics (ONS) also showed the unemployment rate rose to 4.8%, its highest level since November 2016 and up from 4.5% the month before.
Some economists said employers cut roles in anticipation of the furlough scheme – which has just been extended by the chancellor – being phased out by the end of October.
ONS data for October suggested that the number of employees on UK payrolls has fallen by 782,000 since March.
The total number of people officially classed as unemployed rose by 243,000 to 1.62 million in the three months ending in September, the biggest increase since 2009.
The number of redundancies was 181,000 higher than in the second quarter.
The figures suggested that even as the wider economy was apparently bouncing back from the pandemic-driven recession at the start of the year, the jobs crisis worsened.
It is expected to deepen further over coming months.
Last week the Bank of England said it expects unemployment to peak at 7.75% in the second quarter of 2021 though some experts think the jobless rate will be even worse.
Figures later this week are expected to show a partial recovery in GDP, a wider measure of the UK’s economic health, for the third quarter covering the July-September period.
But any pick-up in activity then was not enough to spare hundreds of thousands of workers from being axed, with the ONS jobs data pointing to strong growth in redundancies in the first two weeks of September.
That took its heaviest toll on those aged 16-24 – with the group seeing redundancy rates more than double compared to the same period a year ago.
Even the record redundancy figures – an average over July-September – appear to mask a worsening trend.
Weekly data from the ONS, using a smaller sample size, implies that by the end of September as many as half a million people had been made redundant in the previous three months.
The figures do not include planned job cuts announced more recently by the likes of Sainsbury’s, which revealed last week that it could cut 3,500 jobs.
New lockdown measures across England look set to throw the UK back into a renewed contraction as 2020 draws to an end.
Chancellor Rishi Sunak has extended the furlough scheme subsidising wages for temporarily laid-off workers until the end of March.
Responding to the latest jobless numbers, Mr 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.”
Ruth Gregory, senior UK economist at Capital Economics, said: “September’s rise in the unemployment rate from 4.5% in August to 4.8% suggests that the previous scaling back of the furlough scheme took its toll.
“And with the second lockdown set to send the recovery into reverse, the unemployment rate may yet climb to about 9% next year.
“In response to the government asking firms to shoulder a greater burden of the cost of their furloughed employees, firms reduced their staffing levels at a sharp pace in September.”