LONDON (Reuters) – British employers laid off record numbers in the third quarter and the unemployment rate jumped as the labor market weakened before Finance Minister Rishi Sunak turned back on the measures COVID support.
A record 314,000 British workers were made redundant in the three months to September, 181,000 more than in the second quarter, the Office for National Statistics said on Tuesday.
The unemployment rate rose to 4.8%, the highest rate in the three months through November 2016, dropping from 4.5% in three months to August, as predicted in a Reuters poll of economists.
As the public and investors were cheered on Monday with the news that an experimental COVID-19 vaccine was over 90% effective in trials, ONS data showed tough months lay ahead for many Britons.
Last week Sunak was forced to extend his costly coronavirus leave program, which provides 80% of the wages of temporarily laid-off workers, until the end of March, and he indicated billions of pounds in d other forms of assistance.
“Unfortunately, the extension of the holiday scheme did not come soon enough for some workers, but it should help stem the rise in unemployment over the winter,” said Jon Hudson, fund manager at Premier Miton .
The BoE expects around 5.5 million employees to need time off during a lockdown across England this month, up from just over 2 million in October.
The end of the Brexit transition period in seven weeks has also weighed on employer confidence, as no trade deal has yet been reached between Britain and the European Union.
Sunak said after the data was released that the ONS figures “underscore the scale of the challenge we are facing.”
Critics of Sunak said his previous reluctance to extend the program led to unnecessary layoffs.
“The government’s inability to deal with the scale of this time job crisis has cost people their livelihoods,” said Jonathan Reynolds, the opposition Labor Party spokesperson for the ’employment.
Employment fell by 164,000 in the quarter, a steeper-than-expected decline.
Tax data also released on Tuesday showed a drop of 33,000 employees in October and nearly 800,000 job losses since March.
The number of vacancies has shown signs of recovery, increasing from 146,000 in the three months to October to 525,000, still well below levels above 800,000 seen before the pandemic.
Reporting by Andy Bruce; edited by David Milliken, Larry King