Fears grow over jobless rate as five million still on furlough

MORE than five million workers are still on furlough, official figures showed today, raising fresh jitters about how bad unemployment could become.

With the furlough scheme that sees the Government cover a portion of wages coming to an end in October, calls for it to be extended are growing from both unions and employers. The rate of unemployment went from 3.9% to 4.1% in the three months to July, with the young — those most likely to work in bars and restaurants — hit particularly hard.

Susannah Streeter at Hargreaves Lansdown said: “Generation Z has been hit particularly hard by the economic fall out of the pandemic as the retail and hospitality sectors, which have taken such a battering, are often relied on to help school and university leavers find an entry-level job, and get started in the world of work.

“Sadly, this may not just be a bump in the road but could have long-term consequences for the path of their careers.”

Job losses since the Covid-19 lockdown began in March are nearing 700,000, the ONS reports today. In the past three months, 156,000 were made redundant, the sharpest quarterly rise since 2009.

Nye Cominetti at the Resolution Foundation said: “The reopening of the economy this summer after lockdown may have boosted economic activity, but it has not spurred a recovery in the jobs market.”

There was some good news — hours worked are rising slightly and the construction, transport and storage sectors are showing signs of recovery.