The UK’s unemployment rate reached its highest level in nearly five years in the three months to November as coronavirus cases began to rise for a second time and much of the country returned to a partial lockdown.
Unemployment hit 5 per cent, about 1.72 million people, according to the Office for National Statistics.
That was 418,000 more than for the same period the previous year – the last three-monthly period before coronavirus was identified and began spreading around the world.
The jobless number is the highest since mid-2016, according to official data that also revealed some resilience in the labour market.
The unemployment rate was lower than the 5.1 per cent predicted by economists. The number of people in work fell by 88,000, the least since July as the pace of job cuts slowed.
"Once again the UK labour market surprised to the upside," said Karen Ward, chief market strategist at JP Morgan in London. "The furlough scheme has been the central tenet of the government's economic response to Covid-19 and has worked well."
There were also signs of recovery amid a brief reopening of the economy in December, with tax data showing the number of employees on payrolls rose by more than 52,000 in the month.
An extension of the government's furlough plan, announced alongside details of November's lockdown on October 31, also helped the jobless figures.
That financial support helped protect almost 10 million jobs in 2020 and has been vital to the UK labour market’s performance during the crisis.
Unemployment in my area has rocketed by over 30% sicne March last year - there were 4,520 actual claimantsin December 2020, which was 8.0% of the population aged 16-64. The equivalent UK claimant rate was 6.3%. we need so much more than fancy projects to sort this.
— Alex Cunningham MP (@ACunninghamMP) January 26, 2021
The programme is due to end in April, although sources said that Finance Minister Rishi Sunak is drawing up plans to extend aid with the nation back under a more severe set of restrictions.
New figures on Tuesday also showed the regional impact of job losses in 2020, with London suffering the steepest percentage fall in payroll employees, followed by north-eastern Scotland.
The decline in employment in the latest quarter reflected the loss of part-time work, with the accommodation, arts and recreation sectors particularly hard hit.
