Redundancies hit a record high in the UK in the three months to October. The unemployment rate climbed to 4.9%, and unemployment figures from November looked grim. The Office for National Statistics released official figures, showing that UK company payrolls had 819,000 fewer workers last month.
The ongoing coronavirus lockdowns and restrictions were particularly tough for the hospitality sector. The figures show the industry lost 297,000 jobs between February and November. More bad news is on the way as London enters tier 3 on Wednesday. The capital is home to a range of hospitality firms, which will now have to close their doors again.
During the same period, retail & wholesale lost 160,000 jobs followed by manufacturing. Only two industries managed to create more jobs from February to November. Public administration grew its job figures by 27,000, and health & social work added 74,000 new jobs. The modest gains didn't manage to inspire the overall unemployment figures.
The furlough scheme kept figures smaller
The official figures could have been worse if it wasn’t for the furlough scheme. The government extended the scheme to March, which could prove crucial as different parts of the country continue to grapple with tighter restrictions. However, Labour has criticised the government for moving too slow with the furlough scheme extension.
The furlough scheme will now run until March, allowing businesses to receive help with keeping staff on the payroll. But companies are also concerned about the impact of a no-deal Brexit. There is yet no deal between the UK and the EU, which leaves businesses guessing on what terms will they trade on come January.
Suren Thiru, head of economics at the British Chambers of Commerce, told the BBC, "While the furlough scheme will help safeguard many jobs over the winter months, with businesses facing the prospect of further restrictions and a messy end to the Brexit transition period, major job losses remain probable in the near term".
The unemployment rate could climb further
The ONS figures predate the second lockdown. Unemployment figures could climb in the coming months. The Office for Budgetary Responsibility suggests unemployment could peak at a rate of 9.7% in the future.
There is some light at the end of the tunnel. The UK has begun vaccinating high-risk groups, and a successful rollout of the coronavirus vaccine could help open up the economy. A mass rollout is still months away, and the next few months could prove very challenging.
ONS data also showed a slight increase in job vacancies in the September to November period. During this period, there were 547,000 job vacancies in the UK. However, job losses continue to increase at a higher rate, and the winter months could prove tricky to navigate.