The UK’s unemployment rate rose to 5% in the three months to November, up from 4.9%, as coronavirus continued to hit the jobs market.
An estimated 1.72 million people were unemployed, the Office for National Statistics said.
That was 418,000 more than in the same period the previous year and up 202,000 from the previous three months.
Unemployment reached its highest level since July to September 2015, the ONS said.
It was also the biggest annual increase in unemployment since the three months to December 2009, during the global financial crisis.
The hospitality industry was worst hit by the rise in joblessness, followed by manufacturing.
In both sectors, the number of people unemployed was up by more than 50,000 on the previous year.
Redundancies rose to a record high of 14.2 per 1,000 people.
The redundancy rate was highest for those aged 25 to 34 years, the ONS said.
However, job vacancies also rose, with 81,000 new openings reported in the three months.
“This crisis has gone on far longer than any of us hoped – and every job lost as a result is a tragedy,” said Chancellor Rishi Sunak.
“Whilst the NHS is working hard to protect people with the vaccine, we’re throwing everything we’ve got at supporting businesses, individuals and families.
“Our Plan for Jobs includes grants and loans so that firms can keep employees on, the furlough scheme to help protect jobs, and programmes like Kickstart alongside record investment in skills so that people can find their first job, their next job or a new job if needed.”
With no end in sight to the current lockdown measures, many firms fear that they may not be able to survive the pandemic, with pubs and restaurants bearing the brunt of the restrictions.
“The pandemic continues to rip through the labour market,” said Tej Parikh, chief economist at the Institute of Directors.
“A return to tighter restrictions late last year will have stretched businesses’ ability to retain staff. Meanwhile, the furlough scheme will have provided an invaluable cushion for many firms, preventing unemployment from edging up even further.”
It is “crucial” for the chancellor to extend the furlough scheme and other Covid-19 economic support beyond the spring, he said.
“The forthcoming Budget is a vital moment to help firms retain, retrain and rehire workers as the vaccine rolls out. In particular, the government should provide a relief for employers’ National Insurance contributions and support reskilling opportunities to shore up the recovery.”
Jack Kennedy, UK economist at the global job site Indeed, commented: “The slowdown is turning into a slide. Warning lights on the labour market dashboard are now burning bright, even with the cushioning effect of furlough.
“The unemployment rate hitting a four-year high of 5% will grab most headlines, but the human cost is even starker – over 200,000 people lost their jobs in the last quarter alone.
“The three-month redundancy rate has climbed to a record high. Alongside many businesses cutting administrative roles, hospitality jobs are also under particular pressure. The fear is that with bars, restaurants and hotels still closed until further notice and reeling from a year of total disruption, many of these hospitality jobs won’t be coming back any time soon.
“Few sectors look likely to be able to absorb even a fraction of the rapidly increasing number of jobseekers. In the final three months of 2020, before the new national lockdown was declared, the UK’s total number of available vacancies fell by 10%.
“Reopening in December supported a gain of 52,000 payroll jobs, but the return to national lockdown at the start of 2021 has applied the brakes once more as lockdown bites into employers’ willingness to hire. Indeed’s real-time data shows that new job postings have been trending down for two weeks in a row.
“Today, vacancies are down -38% compared to the same time last year as the effects of Lockdown 3 ripple through the labour market and pull the rug from beneath what had been a slowly improving jobs outlook.”