UK redundancies hit record high as job market slumps in Q3

[LONDON] British employers made a record number of staff redundant in the third quarter and the jobless rate jumped, according to official data that show the labour market declined rapidly before finance minister Rishi Sunak made a U-turn on Covid support measures.

A record 314,000 British workers were made redundant in the three months to September, 181,000 more than in the second quarter, the Office for National Statistics (ONS) said on Tuesday.

The unemployment rate rose to 4.8per cent, as expected in a Reuters poll of economists and the highest rate since the three months to November 2016.

While the public and investors were cheered on Monday by news that an experimental Covid-19 vaccine from Pfizer and BioNTech was more than 90 per cent effective in trials, the ONS data showed some hard months lie ahead for many Britons.

"Unfortunately, a record level of 341,000 redundancies in the past few months show that for many people the additional government support came too late to save their roles," said Jeremy Thomson-Cook, chief economist at currency services company Equals Group.

Employment fell by 164,000 during the quarter, the data showed - a sharper drop than the Reuters poll consensus of 148,000.

The Bank of England (BOE) last week forecast that Britain's unemployment rate would reach 6.3 per cent by the end of this year and peak at 7.7 per cent in the second quarter of next year.

Last week finance minister Rishi Sunak extended his costly coronavirus furlough scheme, which provides 80 per cent of the pay of temporarily laid-off workers, until the end of March and he announced billions of pounds in other forms of support.

Mr Sunak said the figures "underline the scale of the challenge we're facing".

"I want to reassure anyone that is worried about the coming winter months that we will continue to support those affected," he said in a statement after the data was published.

The BOE expects around 5.5 million employees will need support from this programme during an England-wide lockdown this month, up from just over two million in October.

Mr Sunak's critics have said a series of U-turns over employment support policy made it hard for companies to plan ahead at the expense of many jobs.

REUTERS