Redundancies have spiked to a record high in the wake of the coronavirus, new data out this morning shows.
Between July and September, redundancies increased by 195,000 year-on-year, and a record 181,000 on the quarter.
The total figure was also record high, coming in at 314,000, according to the Office for National Statistics figures.
The annual increase in redundancies over the last quarter is the highest since the period between February and April 2009.
The unemployment rate also jumped 0.7 percentage points over the last quarter to 4.8 per cent.
Aviva workplace savings manager Laura Stewart-Smith says the data shows why the government felt compelled to extend the furlough scheme out to March.
She says: “A sharp rise in redundancies over the last month has been partly triggered by firms adjusting their operations to align with significantly reduced demand. Firms are likely to have reneged on hiring processes due to a resurgence in virus cases putting downward pressure on business confidence levels.
“Indications that a ‘loose labour market’ is forming continue to surface. Reduced demand for workers, coupled with an increase in supply caused by an uptick in redundancies, may suppress wages in the medium term.
“Looking ahead, extending the Job Retention Scheme will provide a degree of reassurance to the UK’s workers. Preserving the fundamentals of the country’s labour market will be crucial to the UK’s economic recovery.”
While they have been decreasing over the year, the ONS said that total hours worked had a record increase from the low levels in the previous quarter, as a number of lockdown measures were eased between July and September.
The UK employment rate was estimated at 75.3 per cent, 0.8 percentage points lower than a year earlier and 0.6 percentage points lower than the previous quarter.
Premier UK Growth fund manager Jon Hudson says: “Unfortunately the extension of the furlough scheme didn’t come soon enough for some workers but it should help stem the rise in unemployment over the winter. Combined with yesterday’s positive vaccine news, there is now a good chance the UK’s unemployment rate will end up lower than the Bank of England’s peak forecast of 7.7 per cent next year.”
