Stats show 700,000 UK workers have been removed from the payrolls of British companies since March when the country went into lockdown as unemployment hit 4.1% today.
The figures are for the three months from May to July and are worse than the quarter to June when the rate stood at 3.9%.
There are growing fears that unemployment could worsen over the coming months as the Government’s furlough scheme comes to an end.
The stats post a grim picture as the thousands of layoffs since lockdown lifted underscore the damage caused by the pandemic.
Businesses in industries such as retail, aerospace, tourism, aviation and media have been among those to lay off huge proportions of their workforce.
The Office for National Statistics said young workers had been particularly hard hit by the pandemic.
The ONS said: “Looking in more detail at unemployment by age, the estimated number of people unemployed aged 16 to 24 years increased by 76,000 on the year to 563,000. Other age groups saw falls or very little change over the year.”
ONS director of economic statistics Darren Morgan added: “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.”
Chancellor, Rishi Sunak, said: “This is a difficult time for many as the pandemic continues to have a profound impact on people’s jobs and livelihoods. That’s why protecting jobs and helping people back into work continues to be my number one priority.
“We’ve taken decisive action throughout this crisis, introducing the furlough scheme and outlining a comprehensive Plan for Jobs to support, protect and create opportunities. And we’ll continue to do that through the autumn, including by supporting people back to work through policies such as our Job Retention Bonus worth up to £9 billion.”
Despite the dismal figures some are against Sunak extending the fulough scheme.
James Reed, chairman of recruiter Reed, said: “In May, I predicted the UK was facing a tsunami of job losses when the furlough scheme ends, and today’s ONS figures suggest the wave is set to crash through the economy this autumn.
“Although these statistics will cause concern, now is not the time to panic and extend the furlough scheme. It’s time for the country to move on. Businesses need to level with their furloughed staff about their future as soon as they are able to. People are facing uncertainty over whether their jobs will exist once the furlough scheme winds down, and are in need of assurances either way.
“They must be allowed to move on, learn new skills, and begin searching for a new employer.”
Others want to see tax cuts to help employers.
BCC head of economics Suren Thiru added: “To help avoid a damaging cliff edge for jobs more must be done help firms keep staff on through this deeply challenging period. This should include a significant cut in employer National Insurance Contributions and more substantial support for firms placed under local lockdowns.”