Since February 2020, the number of payroll employees has fallen by 828,000, however, the ONS said larger falls were seen at the start of the coronavirus pandemic.
Data from its Labour Force Survey (LFS) showed a large increase in the unemployment rate while the employment rate continues to fall. The number of redundancies reached a “record high” in September to November 2020 of 14.2 per thousand, although it dropped from the peak in September.
In addition, despite decreasing over the year, total hours worked increased from the low levels in the previous quarter, even with the September to November period covering a time when a number of coronavirus lockdown measures were reintroduced.
It also found there were an estimated 578,000 vacancies in the UK in October to December 2020 – 224,000 fewer than a year ago but 81,000 more than the previous quarter.
Commenting on the new figures, Matthew Percival, CBI director of People and Skills, said: “Unemployment rising to 5% and continued high redundancies show the difficult decisions businesses face.
“The prospect of extending lockdown makes it urgent that the chancellor acts now to extent job and business support. The Job Retention Scheme needs to run to at least the end of June to avoid a cliff-edge.”
UKHospitality chief executive Kate Nicholls, added: “This is a reminder, not that it is needed, that we have been hit hardest by this. Unless we want to see unemployment in our sector rise even further, we need more support to keep businesses alive and these jobs secure. The VAT cut and business rates holiday must be extended to give employers some breathing room to keep jobs safe.
“It is vital that we have a clear exit strategy and a route map to recovery as soon as possible. Hospitality can be the key to jobs and skills for young people and we can plug the gaps left by retail and help revitalise the economy. We can only do this with the right support to see us through the crisis, though.”