The sharp rise in the jobless figures comes amid fears of yet more job losses ahead of winter and the end of the government’s huge subsidy program for furloughed workers, which expires on Oct. 31, and is to be replaced by a less generous scheme.
“A higher case rate, new restrictions, and less government support are likely to push unemployment up over the winter months,” said Ian Stewart, chief economist at accounting experts Deloitte.
“The path of the virus continues to dictate the direction of the economy.”
Since April, the government’s Coronavirus Job Retention Scheme has kept unemployment figures down by paying most of the wages of around 9.6 million people, about a third of the workforce, at a cost to the government of almost 40 billion pounds ($52 billion).
Around 1.2 million employers have used the scheme, which has been winding down over recent months, to retain and pay workers who, even though they were not actually at work, were not counted in the jobless figures.
Unemployment is expected to increase even further when the scheme ends and many of those still furloughed are made redundant.
The government’s imposition of local restrictions to slow the spread of the CCP (Chinese Communist Party) virus, commonly known as the novel coronavirus, is also raising concern amid fears that unemployment could soar towards 3 million, levels not seen since the early 1990s.
Prime Minister Boris Johnson on Monday announced a new three-tiered CCP virus restriction system to simplify the patchwork of often complicated and confusing restrictions.
The hospitality sector, however, says it is being brought to its knees by virus restrictions.
Liverpool in Northern England was placed in the highest of the risk categories in the three-tiered system.
Due to this, from Oct. 14 many pubs and bars are among the businesses that will have to close their doors in the area.
One pub landlady, Karen Strickland of The Grapes pub in Liverpool, said their income was already down by 70 percent with the existing enforced countrywide closing time of 10 p.m., and the government’s support scheme help was not enough.
“It’s absolutely horrendous. My staff, some of them still haven’t come back to work yet, their job’s just not here for them,” she said, adding it made no sense to single out pubs.
Before the government announced the new three-tier system of restrictions, a group of brewers and pub owners said that they would have been “left with no option” but to seek a judicial review legal action, should Johnson shut down pubs in the Greater Manchester area.
The area was then categorized as a tier two area, so is not currently subject to shut-downs.
The rise in Britain’s jobless figures were published just days after the World Health Organization appealed to world leaders to stop using lockdown as their primary method to control the CCP virus.
Lily Zhou, Reuters, and The Associated Press contributed to this report.