Unemployment at five year high - but region braced for worse to come

Britain's jobless rate has soared to its highest level for more than five years, but an East Anglian business leader fears...

Britain's jobless rate has soared to its highest level for more than five years, but an East Anglian business leader fears the worst could be ahead - Credit: PA

Unemployment has hit its highest level for five years - but an East Anglian business leader has warned there could be worse to come amid the fallout from the coronavirus pandemic.

The Office for National Statistics (ONS) said the rate of unemployment hit 5.1% between October and December – up from 5% in the previous quarter and its highest since early 2016.

Overall, unemployment stood at 1.7million between October and December - up 454,000 over the year, marking the biggest annual increase since the 2008 financial crisis.

Statistics from the ONS showed that, as of January, 5.3% of people in the East of England were claiming Universal Credit - compared to 6.3% in the country as a whole.

The furlough scheme is widely seen as cushioning the economic blow of the pandemic, but there are fears that its withdrawal at the end of March could cause more unemployment.

Chris Starkie, chief executive of New Anglia Local Enterprise Partnership, said: "It seems probable that a proportion of those who are currently on furlough will not have a job to go back to.

"One of the problems is that in certain sectors — such as food, accommodation, arts, entertainment etc — there is still a huge degree of uncertainty around precisely when they will be able to open, and then further when they will be able to return to normal capacity.

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"If limitations on capacity continue through the whole of 2021, then these sectors will continue to need to adjust.

"The warmer weather that is likely to occur as we move into the spring should coincide with an easing of restrictions on certain hospitality activities – and therefore a recovery of sorts seems highly probable.

"However, there is still a good deal of uncertainty as to the nature and pace of any recovery."

Chancellor Rishi Sunak has pledged to set out his job support plans in next week’s budget to ease pressure on sectors which will have to wait to reopen.

Mr Sunak said: “I know how incredibly tough the past year has been for everyone, and every job lost is a personal tragedy.”

“At the Budget next week I will set out the next stage of our Plan for Jobs, and the support we’ll provide through the remainder of the pandemic and our recovery.