Unemployment at highest rate in three years

As the effects of the pandemic continue, the rate of unemployment has non-surprisingly continued to increase at a rapid rate. The rate grew to 4.5% in three months to August compared with 2.1% in the preceding quarter, making it the highest level of unemployment in over three years. The number of redundancies has also seen a surge, seeing their highest level since 2009 according to the Office for National Statistics (ONS).

The ONS also reported that approximately 1.5million people were unemployed in the months of June to August and redundancies also high at 227,000 following a 114,000 increase on the quarter.

One of the hardest hit groups has been young people between the ages of 16 to 24, with 156,000 fewer employed compared to the number three months ago. This is largely due to individuals in this age group are more likely to work within the hospitality and tourism sectors. Jobs within these sectors have been particularly hard hit by the lockdown and ongoing restrictions which accounts for a large number of people out of work.

Throughout lockdown, although many found themselves out of work, employers all over the country were able to keep the majority of their staff working by utilising the furlough scheme. With the furlough scheme coming to a close at the end of October, there are concerns surrounding how employers will cope with managing their staff forces, with particular worries of large-scale redundancies. The Chancellor, Rishi Sunak, recently announced a new programme to replace the furlough scheme. The Job Support Scheme will support businesses, who have been forced to close due to Covid restrictions, by paying two-thirds (67%) of their usual salaries for six months, up to a maximum of £2,100 a month. In order to be eligible, individuals must work for at least a third of their usual hours and, for those hours not worked, the government and employer will pay one third of the remaining wages each. The scheme, which starts in November, will be open to employers across the UK, including those who have not used the furlough scheme.

More information on the Job Support Scheme can be found here.