UK unemployment has risen to 4.1% in the three months to July with 695,000 workers losing their jobs since March.
The Office for National Statistics (ONS) said the unemployment rate increased from 3.9%, which was recorded in the previous quarter.
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It means unemployment increased by 104,000 to 1.4million in the quarter to July.
Taking into account August’s figures, another 36,000 jobs fell off payrolls last month as the coronavirus crisis continued to impact the labour market.
But August’s numbers are based on a “flash estimate” using early data and could still change.
The ONS said those aged between 16 and 24 were especially badly hit compared to other age groups.
What to do if you’re facing redundancy
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- Know your rights: If you’re faced with redundancy, your employer must treat you fairly and act in accordance with your redundancy rights. That includes making sure you’re consulted, and giving you a notice period.
- Redundancy pay: You are also entitled to redundancy pay if you have been with the company for two years or more. The amount you are compensated will vary depending on your age, and how long you have been with the company.
- Review your finances: If you do receive a redundancy payment, don’t get tempted to spend it straight away. It might take time to find a new job, so it’s worth making a budget for yourself.
- Search for work: Once you’ve sorted your finances, you can then start to look for a new job. You may need to update your CV – we round up eight tips from recruitment expertsand other little-known schemes to help you find a job.
The estimated number of unemployed youngsters increased by 76,000 in the quarter to July, pushing up the yearly figure to 563,000, compared to falls or little changes for other age groups.
Meanwhile, the number of people claiming work-related benefits such as Universal Credit, including those on low incomes, was 2.7million in August – up by 121% since March.
In the three months between June and August, vacancy levels started to recover and were almost 30% higher than the quarter between April and June.
Unemployment hasn’t risen as much as feared because a large number of workers have been put on the government’s furlough scheme, meaning they’re still classed as employed.
Experts say the full effect on unemployment will be felt once the scheme ends in October.
Trade bodies and top politicians have called for an extension of the scheme, which had helped 9.6million people by August 16 this year.
The Institute for Employment Studies this week predicted that half a million jobs will be lost this autumn as unemployment reaches its highest level since the mid-90s.
Meanwhile, the Bank of England predicted last month that unemployment could hit 7.5% due to the coronavirus crisis.
The Office for Budget Responsibility (OBR) recently also said that unemployment could hit 12% this year as the furlough scheme winds down.
This would affect 3million people, up from 1.3million in 2019.
In June alone, the number of Brits on payroll fell by 74,000 workers.
Meanwhile early figures for July suggested 114,000 workers lost their jobs.
ONS director of economic statistics Darren Morgan said: “Some effects of the pandemic on the labour market were beginning to unwind in July as parts of the economy reopened.
“Fewer workers were away on furlough and average hours rose.
“The number of job vacancies continued to recover into August, too.
“Nonetheless, with the number of employees on the payroll down again in August and both unemployment and redundancies sharply up in July, it is clear that coronavirus is still having a big impact on the world of work.”
Meanwhile, Suren Thiru, head of economics of the British Chambers of Commerce (BCC), said: “The decline in employees on payrolls and the rise in the claimant count in August as the furlough scheme began to taper is a clear warning that the full impact of coronavirus on the UK labour market is yet to come.
“While there was a rise in the number of job vacancies, this is more likely to reflect a temporary bounce as the economy gradually opened, rather than a meaningful upturn in demand for labour.
“With many firms still facing waves of cash flow problems, rising costs and an uncertain economic outlook, it is probable that unemployment will escalate sharply as government support winds down.”
Under the changes to the coronavirus jobs retention scheme employers had to chip in to pay for national insurance and pension contributions for furloughed staff from August.
As of September 1, the government’s contribution then fell to 70% of wages up to a cap of £2,187.50 a month.
From October 1, the government’s contribution will fall to 60% of wages before the scheme ends on October 31.
In the mini-Budget in July, chancellor Rishi Sunak announced a £1,000 bonus per furloughed employee that businesses re-employ.
