UK unemployment rises at fastest pace since 2009 as redundancies hit record high

Tom Belger
·Finance and policy reporter
·3 min read

Watch: Redundancies hit record high as hundreds of thousands lose jobs

UK unemployment has risen at its fastest pace in more than a decade, with redundancies surging to a record high between July and September.

The unemployment rate reached 4.8% in the three months to September, up from 4.5% a month earlier and as expected by analysts, according to Office for National Statistics (ONS) figures published on Tuesday.

It marked the largest quarterly and annual increase in unemployment numbers since 2009, with 1.62 million people out of work between July and September. Britain lost 782,000 jobs on employer payrolls between March and October, another 33,000 higher than the previous month’s figures.

UK chancellor Rishi Sunak responded to the ONS figures and said in a statement on Tuesday: “I want to reassure anyone that is worried about the coming winter months that we will continue to support those affected.”

Joblessness edged higher as lay-offs grew and more people began hunting for work even before new national lockdowns hobbled economic activity in England, Wales, and Northern Ireland. Redundancies have smashed through records, rising at the fastest quarter-on-quarter rate ever and hitting their highest ever three-month tally of 314,000.

An empty high street in Guilford, Surrey, at the start of a four week national lockdown for England. (Photo by Adam Davy/PA Images via Getty Images)
An empty high street in Guilford, Surrey, at the start of a four week national lockdown for England. (Photo by Adam Davy/PA Images via Getty Images)

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A string of well-known companies have announced mass job cuts in recent weeks and months, including Sainsbury’s, Lloyds, John Lewis and Rolls-Royce. Some have blamed the planned expiry of the furlough scheme at the end of October, with employers unable to retain staff without the wage subsidies that have safeguarded many at-risk roles since March.

“With furlough helping to disguise the rise in unemployment levels initially, the extension last week until March next year is likely to have come too late for a lot of people in vulnerable jobs, given that a lot of employers had already started to cut back on their head count,” said Michael Hewson, chief market analyst at CMC Markets UK.

New government measures to help

UK prime minister Boris Johnson extended furlough grants, helping employers cover 80% of typical wages for at-risk staff placed on leave, late last month by another month. The announcement was quickly followed by another extension by chancellor Rishi Sunak until March as England returned to lockdown.

HMRC has now paid the grants to 1.2 million employers, supporting 9.6 million roles this year at a cost of £41.4bn so far. The government had been seeking to wind down and replace furlough with a less generous job support scheme subsidising part-time work, but new COVID-19 restrictions and political pressure forced the furlough extension.

Samuel Tombs of Pantheon Macroeconomics added that the re-opening of schools in September is likely to have encouraged some out-of-work parents to look for jobs. Individuals have to be looking and available for work to be classed officially as ‘unemployed.’ Otherwise they are categorised as ‘economically inactive,’ a category not included in headline unemployment figures.

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