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Record Number of Redundancies in the UK in the Last Quarter

The employment market in the UK continues to suffer as 2020 draws to a close, with the last quarter recording a record high in the number of workers being made jobless. This trend has been put down to the second wave of coronavirus infections and the restrictions that followed on from it.

The Latest Numbers

The Office for National Statistics (ONS) said that the number of people made redundant increased to 370,000 in the quarter up to the end of October. This was an historic increase of 217,000 from the previous three months and meant that the unemployment rate in the country rose from 4.8% to 4.9%.

Among the sectors to be hardest hit were retail and hospitality. It should also be remembered that this period saw the furlough scheme become less generous and only a last-minute u-turn by the government prevented it from coming to an end in October. It will now continue until the end of March.

Comparing the UK’s payroll numbers in November to those in February, we can see that there are 820,000 fewer people in work. The hospitality industry bore the brunt of this steep drop, with more than a third of the job losses coming from this sector.

The amount of new hires remains flat, with the 547,000 vacancies in the last quarter an improvement on what was seen in the previous three months but still more than 30% fewer than a year ago. This also reflects the fact that a number of businesses are still using debt collection firms to maintain some form of cash flow.

A Look Ahead

A slightly more positive picture was painted towards the end of the month, as job losses began to slow. The ONS pointed out that their research shows that 7% of companies now expect to cut jobs in the next quarter, compared to 9% when they carried out the same survey in October.

Suren Thiru is the head of economics at the British Chambers of Commerce, and he said that the extension to the furlough scheme will help to keep people in jobs over winter. However, he stated that failure to reach a Brexit deal is likely to cause more problems by “limiting the competitiveness and viability” of some companies.

There are also suggestions that chancellor Rishi Sunak will now come under increased pressure to give extra financial aid to those workers and businesses that are suffering the most due to the on-going crisis.

The government are due to review the furlough scheme in January and the shadow chancellor, Anneliese Dodds, believes that the decision to wind down the programme and then keep it going caused unnecessary damage to the economy.

Frances O’Grady, who is the general secretary of the TUC, also spoke out on these numbers, claiming that we are now “staring down the barrel of mass unemployment.” She said that there is no time left to waste before more money is invested in job creation and in increasing the value of universal credit benefits.