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Hospitality worst-hit as unemployment rises again

Hospitality worst-hit as unemployment rises again
Business
Hospitality was the worst hit sector, accounting for a third of the job losses, followed by retail, according to the Office for National Statistics.

The unemployment rate rose to 4.9% in the three months to October, with the jobless total up to 1.7 million people.

Redundancies hit a record high over the period.

Hospitality has been particularly badly hit by coronavirus lockdowns and restrictions, resulting in large numbers of workers losing their jobs.

Bars and restaurants in England had to shut throughout November, and thousands based in areas covered by tier 3 rules remain closed.

The industry will suffer even more when London, a hive of hospitality firms, enters tier 3 on Wednesday.

"We can see the hospitality sector has really struggled during the pandemic," the ONS s director of economic statistics, Darren Morgan, told the Today programme.

"It you look at the number of people losing their jobs, the number of people on furlough and the vacancies available for people looking for jobs in the hospitality sector, all that adds up to a very difficult time for that industry."

Industry body UK Hospitality criticised the move to place London and parts of Essex and Hertfordshire into tier 3 following a surge in infections.

Boss Kate Nicholls said: "The spread is being predominantly driven through schools... yet, once again, it is hospitality that will take the hit.

"So many pubs, restaurants, bars, cafes and hotels, having invested so much to make their venues safe, are only just clinging on by the skin of their teeth."

The jobs numbers are again grim over the course of the pandemic with 819,000 fewer employees on payrolls since February, and a record rise in redundancies in the three months to October.

However, without extension of the furlough scheme to March they would have been even more concerning. The official headline unemployment rate is up only a little at 4.9%. But for most of October it was above 5%.

These numbers reflect mainly the period before the second national lockdown. And for the first time they are broken down by industry. Well over half of the lost employees during the pandemic have been in hospitality and retail, 456,837 out of 819,000. Health and social care have seen an extra 74,342 jobs.

While some optimism has emerged from the prospect of a functioning vaccine, the next few months are likely to remain very challenging, with unemployment continuing to rise. Those rises continue to be contained by the furlough scheme.

Redundancies hit a record 370,000 in the three months to October, according to the ONS, although this began to ease towards the end of the period.

But the figures pre-date the November lockdown and unemployment is excepted to continue to rise, peaking at a rate of 9.7% this year, according to the Office for Budgetary Responsibility (OBR), the government s independent forecaster.

Suren Thiru, head of economics at the British Chambers of Commerce, said: "The latest data confirms that coronavirus continues to weigh heavily on the UK labour market.

"While the furlough scheme will help safeguard many jobs over the winter months, with businesses facing the prospect of further restrictions and a messy end to the Brexit transition period, major job losses remain probable in the near term."

Many companies began to cut jobs in anticipation of the end of the furlough wage support scheme, which was originally meant to finish on 31 October.

Chancellor Rishi Sunak extended the scheme until March as the second England lockdown began last month, but some argue he should have moved sooner.

Commenting on the latest unemployment figures, Mr Sunak said: "We ve provided over £280bn of support, including protecting over nine million jobs with the furlough scheme and supporting millions of businesses to keep going with our loans, grants and tax cuts.

"But we know that, sadly, many people are already facing unemployment. That s why our Plan for Jobs is also helping to create new jobs, including through our £2bn Kickstart scheme and expanded apprenticeships and traineeships."

But Labour s shadow chancellor, Anneliese Dodds, said the chancellor s "irresponsible decisions" had cost jobs and left the UK with the "worst recession of any major economy".

"It s no coincidence that redundancies rocketed to record levels when the clock was ticking down to the chancellor s furlough cliff edge and rising employer contributions were putting businesses under pressure.

"Employers can t afford to wait until the last minute again for this chancellor to decide what happens to the furlough scheme at the end of January. They need clarity now."

ONS data also showed that average growth in pay, excluding bonuses, rose slightly to 2.8%. However the ONS noted that a big factor behind this growth was the fall in the number and proportion of lower-paid jobs.

The ONS also said there were 547,000 job vacancies in the September to November period, up by 110,000 from the previous three months.
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