Redundancies and unemployment rise as the economic side-effects of the coronavirus hit businesses.
Almost 700,000 jobs have been lost since the coronavirus outbreak hit the UK, the Office for National Statistics (ONS) has warned.
ONS data shows the unemployment rate has increased for the first time since the start of the pandemic in March, rising to a two-year high of 4.1% in the three months to July.
The figure had stayed at 3.9% since the start of the year. But estimates for May to July 2020 show an estimated 1.4 million people were unemployed, 104,000 more than a year earlier and 62,000 more than the previous quarter.
Redundancies are now at their highest level since the three months to November 2012, increasing by 58,000 on the year and 48,000 on the quarter to 156,000, according to the data.
These are the largest annual and quarterly increases seen since 2009 but the ONS said the level remains well below that seen during the 2008 downturn.
The estimated UK unemployment rate was 4.3% for men and 3.8% for women and the ONS said the largest increases were among 16-to 24-year-olds.
- How to invest during a recession: top tips and tactics
- UK economy will take two years to recover, experts say
The ONS estimated that 32.98 million people aged 16 years and over are in employment, which is 202,000 more than a year earlier but 12,000 fewer than the previous quarter.
There was a record decrease of 18-to 24-year olds in employment, down 146,000, and the number of women aged 65 or over in work fell by 79,000.
The ONS said early indicators for August 2020 suggest that the number of employees in the UK on payrolls was down by 695,000 compared with March 2020.
- Voluntary redundancy: should I stay or should I go?
- Find out more about interactive investor SIPP and pensions here
It comes as companies enter the final months of the furlough scheme, which provides government support for employee wages. It ends in October.
There are fears this could lead to more unemployment.
Shona Lowe, private client and corporate director at financial planners 1825, says: “It is a harsh consequence of the economic downturn caused by coronavirus that lots of people in the UK are facing redundancy.
“Well-known high-street names have announced that many jobs are at risk and as the furlough scheme puts more financial responsibility on employers, it’s likely that we will see more of this in the coming months.”
These articles are provided for information purposes only. Occasionally, an opinion about whether to buy or sell a specific investment may be provided by third parties. The content is not intended to be a personal recommendation to buy or sell any financial instrument or product, or to adopt any investment strategy as it is not provided based on an assessment of your investing knowledge and experience, your financial situation or your investment objectives. The value of your investments, and the income derived from them, may go down as well as up. You may not get back all the money that you invest. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.