UK unemployment rises to 4.8%, highest since 2016

U.K. unemployment rose to its highest level since 2016 in the three months through September as the COVID-19 pandemic forced employers to shed workers, the Office for National Statistics said Tuesday.

The unemployment rate increased to 4.8% in the period, up 0.3 percentage points from last month and a full percentage point from a year earlier, the ONS said. The figure is still well below the peak of 8.5% reached in late 2011 after the global financial crisis, largely thanks to a government furlough program that at one point paid to keep a third of the workforce on payrolls.

Government restrictions on business and social interaction to slow the spread of COVID-19 have reduced sales for shops, restaurants and pubs, forcing many businesses to lay off workers and others to shut their doors for good. Employers are warning about there may be another round of cuts after the government imposed a second national lockdown on England, which is scheduled to run through Dec. 2.

“Today’s figures underline the scale of the challenge we’re facing,’’ Treasury chief Rishi Sunak said in a statement. “I know that this is a tough time for those who have sadly already lost their jobs, and I want to reassure anyone that is worried about the coming winter months that we will continue to support those affected and protect the lives and livelihoods of people across this country.”

Sunak said last week that he was extending the government furlough program, which pays 80% of wages of workers who are idled by the pandemic, up to 2,500 pounds a month, through the end of March. That should help contain a surge in joblessness.

The number of people on company payrolls has dropped by 782,000 since the start of the pandemic, the ONS said. The figure stood at 673,000 last month.

While the number of jobs available in the economy has started to recover, vacancies remain below pre-pandemic levels. Vacancies increased to 488,000 in the July to September period, but there are still 332,000 fewer vacancies than at this time last year, the ONS said.

Matthew Percival, director for people and skills for the Confederation of British Industries, said there was a “a toxic mix of a devastating rise in redundancies and very few people able to find alternative jobs, even before entering a second national lockdown.’’

Percival called on the government to create an economic recovery commission, including representatives from business and labor unions.

“The next couple of months will be crucial,” he said. “The government must use this time well to get ahead of the curve on the economy as well as the virus.”