The rate of UK unemployment rose to 4.8% in the three months to September, up from 4.5%, as coronavirus continued to hit the jobs market
Analysts said the extension had come “too late in the day” to save some jobs and further big rises in unemployment were likely in the coming months following an increase in the rate of UK unemployment.
The number of people out of work rose by 243,000 in the three-month period, the largest increase since May 2009.
The redundancy figure was higher, however, because it included people who may have lost their jobs and then retired or decided to stop looking for work.
The ONS figures also showed there was a big rise in the number of 16 to 24-year-olds out of work.
This comes after Chancellor of the Exchequer Rishi Sunak has vowed that the government will “go further” as he has announced three new measures that are supposed to help workers and businesses to get through the winter months, as well as the ongoing second spike of COVID-19.
The unemployment rate among young people is far higher than the overall rate.
ONS deputy national statistician for economic statistics Jonathan Athow told the BBC: “We’re seeing a continuation of a weakening of the labour market, fewer people on the payrolls and fewer people employed overall. That is now passing through to increasing unemployment altogether.”
He said the UK was starting to see people fall out of work in quite large numbers. However, there were still about 2.5 million people on furlough, with “quite a lot of uncertainty” about what would happen to them.
“We might see furlough creep up again and that might mean we don’t see any further big increases in redundancies or unemployment, but it’s way too early to tell what will happen,” he added.
Mr Athow said vacancies continued to recover from the very low numbers seen earlier in the year, but those figures predated the reintroduction of lockdown restrictions in many parts of the UK.
Tej Parikh, chief economist at the Institute of Directors, said the pandemic continued to bring “turbulence” to the UK jobs market.
“The extension of the furlough scheme through to March is welcome as it has given directors certainty to plan ahead for their staff.”
“Unfortunately, the change appears to have come too late in the day for some.”
This comes after Ministers are currently being warned that £13bn of additional spending will be needed each year to ensure that the UK’s workforce will be able to prosper in the future economy. Research by the Confederation of British Industry (CBI) showed 90% of people will need new skills by 2030.
Suren Thiru, head of economics at the British Chambers of Commerce, said: “While there was a rise in the number of job vacancies, this is more likely to reflect a temporary bounce as the economy reopened before recent restrictions were reintroduced, rather than a meaningful upturn in demand for labour.”
He said the extension to the furlough scheme would safeguard a significant number of jobs in the short term.
“However, with firms facing another wave of severely diminished cashflow and revenue and with gaps in government support persisting, further substantial rises in unemployment remain likely in the coming months.”
