Unemployment surges to highest level in three years, ONS data shows

Young men are ‘fading particularly fast in the face of the pandemic’, say experts, warning the new tiered system and end of furlough could cause even more job cuts

The UK unemployment rate has surged to its highest level in more than three years, official figures show, as the coronavirus crisis continues to hit jobs. 

Figures from the Office for National Statistics (ONS) have shown the unemployment rate for all people in the UK was 4.5 per cent for June to August – 0.4 percentage points higher than the previous quarter, and 0.6 percentage points higher than a year earlier. 

The ONS estimated 1.52 million people were unemployed, 209,000 more than during June to August 2019.

During this same period, redundancies increased by a record 113,000 on the year, and a record 114,000 on the quarter, to 227,000. The ONS said this annual increase was both the largest spike and the highest absolute level since 2009.

Speaking to the BBC’s Today programme, Jonathan Athow, the ONS’s deputy national statistician for economic statistics, said the large number of redundancies had been made in sectors hit particularly hard by the pandemic. “You're seeing things like hospitality having high levels of job losses. Also some places like travel agencies and employment agencies,” he said.

As a result of the ongoing crisis, Athow added there had been a “sharp increase” in those out of work and job hunting since March. “Overall employment is down about half a million since the pandemic began and there are particular groups that seem to be most affected – young people in particular," he said. “[Of those out of work], about 300,000 are aged 16-24, so about 60 per cent of the fall in employment... that’s really disproportionate.”

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Responding to today’s unemployment figures, chancellor Rishi Sunak suggested people who had lost their job as a result of the pandemic should consider retraining. “I’ve been honest with people from the start that we would unfortunately not be able to save every job,” Sunak said, adding that, for those who had lost their job, opportunities were available through apprenticeships, traineeships and the £2bn Kickstart scheme, as well as extra work search support.

However, Gerwyn Davies, senior labour market adviser for the CIPD,  called for “much more immediate” public investment for training and reskilling above what had been announced so far. He added that young men were “fading particularly fast in the face of the pandemic”.

The ONS estimated the unemployment rate for men was 4.9 per cent, 0.7 percentage points higher than the previous quarter. In comparison, the unemployment rate for women was 4 per cent, only 0.1 percentage points higher than the previous quarter. Among men aged 18 to 24, one in six (15.7 per cent) were unemployed, compared to just 10.2 per cent of women of the same age. 

“The worry is that the situation will get much worse, with employment prospects deteriorating rapidly across the board as the job retention scheme closes alongside a swell of school leavers and new graduates who are currently seeking to enter the jobs market,” Davies said.

“What is clear is that much more immediate public investment for training and reskilling is required above what has been announced to date as part of the government’s lifetime skills guarantee.” Davies added this would help workers in the manual and elementary occupations most affected by the outbreak develop the skills needed to compete for jobs in areas of the economy still growing.

The new ONS data came as the government prepared to impose new local lockdown rules that would see some businesses forced to close. Prime minister Boris Johnson yesterday (12 October) confirmed the introduction of a three-tiered local lockdown system for England, separating the country into different levels of alertness, starting with medium and increasing to very high.

Areas falling under the most severe ‘very high’ alert level will see the closure of pubs and bars and potentially restrictions on the hospitality, leisure, entertainment and personal care sectors. However, Johnson said the retail sector, schools and universities would remain open. From Wednesday (14 October), the metropolitan area of Merseyside will be the first subjected to these most stringent lockdown rules.

Financial support – including through the government’s extended furlough scheme – will be available to businesses told to close. 

However, Kirsty Rogers, employment partner at DWF, said the new tiered system, coupled with the end of the nationwide furlough scheme at the end of this month, could cause significant unemployment rises in the future. 

“Although the government has announced a number of measures to help save jobs – from the job retention bonus to the job support scheme – it is questionable whether this will be enough for businesses in real difficulties,” she said.

“This is an incredibly challenging period for employers – longer-term strategies and support will need to be implemented to help tackle unemployment.”