Jobless total rockets to a 5-year high

UNEMPLOYMENT is set to hit its highest level in nearly five years despite the Government’s job support schemes, new data will show on Tuesday.

Economists believe the Office for National Statistics will say the unemployment rate has risen from 4.9 to 5.1 per cent in November. The last time it was so high wasapril 2016.

Chancellor Rishi Sunak’s job retention scheme and other measures have helped keep a lid on rising unemployment. The scheme has been extended four times since it was brought in at the start of the pandemic.

However furlough will come to an end on April 30. As a result, Howard Archer, chief economic adviser to the EY ITEM Club think tank, predicted the unemployment rate will hit 7 per cent by the middle of the year.

He added: “The retail, hospitality and leisure sectors are probably going to account for the bulk of the job losses, there may be some employers who won’t take back workers after furlough ends.”

Investec chief UK economist Philip Shaw pointed out that while the unemployment rate is set to spike, it is still forecast to be lower than the rise we saw in the aftermath of the global financial crisis and the Eurozone debt crisis. The rate peaked at 8.4 per cent in January 2011.

He said: “We have the jobless total rising but it is relatively slowly because of the job retention scheme and other support measures.

“Much will depend on the timing of the unwinding of those measures and what state the economy is in when that happens.”