New statistics reveal that the unemployment rate in the UK has risen to an estimated 5.1 per cent in the three months leading up to December 2020.

Data provided by the Office for National Statistics (ONS) has found that unemployment in the UK rose significantly during the end of last year, reaching higher levels than in the previous five years.

Estimates suggest that unemployment rose to 5.1 per cent by December 2020 which was 1.3 per cent higher than a year earlier and a 0.4 per cent increase compared to data from the previous quarter.

Particularly impacted by unemployment were those aged between under 25, accounting for almost three-fifths of these cases.

As predicted, the employment rate has fallen resultingly. Within the last three months of last year, employment levels were predicted at 75 per cent. This was 1.5 percentage points lower than December 2019 and 0.3 points lower than the last quarter on record.

Despite the toll the pandemic has taken on unemployment, the number of employees on payroll could suggest a growing improvement within the labour market.

ONS reported that, in January 2021,  83,000 more people were in payrolled employment when compared with December 2020. In addition, it was stated that this was the second monthly increase – suggesting the number of people within employment is slowly rising.

The number of vacancies also picked up between November 2020 and January 2021 with around 599,000 being available which was 64,000 than the previous quarter.

However, experts have suggested that the true level of unemployment is yet to be revealed due to the impact of the Coronavirus Job Retention Scheme.

Jonathan Athow, ONS Deputy National Statistician for economic statistics, said:

Our survey shows that the unemployment rate has had the biggest annual rise since the financial crisis

However, the proportion of people who are neither working nor looking for work has stabilised after rising sharply at the start of the pandemic, with many people who lost their jobs early on having now started looking for work.

There is a huge amount of uncertainty about what will happen to [furloughed employees] when that scheme ends.

Kirstie Donnelly MBE, CEO of City & Guilds Group, commented:

Furlough has been a lifeline to millions of people and provided much-needed support at a time of seemingly never ending uncertainty. However, the reality is that it cannot continue to mask unemployment forever. We need to think differently about how to help our people and economy recover from the impact of coronavirus, and that means matching skills to jobs, and supply to labour market demand. This is about getting people who have either already lost their jobs, or are in ‘at risk’ jobs, back into meaningful work.

At the heart of any solution must be a recognition of the immense value of transferable skills as people navigate the tricky terrain of leaving one occupation to a completely new industry.

Government funding for short sharp top up skills interventions will be key to turn a burgeoning problem into opportunities for all. Additionally, employers within growth sectors who are actively recruiting could help play a role in the recovery of the country by recruiting from a wider, more diverse talent pool to provide local communities with the much needed support.

We urge Government to prioritise the creation of long-term solutions to curtail unemployment.