UK unemployment rate spikes to 4.5% amid winter job fears

London: Unemployment across the UK spiked sharply higher in August, clear evidence that the jobless rate is set to surge higher when a British government salary-support scheme ends this month and new restrictions are imposed on local areas to suppress a second wave of the Coronavirus.

The Office for National Statistics said Tuesday that unemployment rose 138,000 in the three months to August from the previous three-month period. That saw the unemployment rate jump to 4.5 per cent, from 4.1 per cent .

So far, Britain has been spared the sharp rises in unemployment seen in the United States because of the government's Coronavirus Job Retention Scheme, which has paid most of the salaries of workers who have not been fired.

Some 1.2 million employers have taken advantage of the program to furlough 9.6 million people at a cost to the government of nearly 40 billion pounds. At one stage, around 30% of the U.K.'s working population was on furlough. Although these workers weren't working over the past few months, they were not counted as unemployed. Since the program ends at the end of October, many of those still on furlough are expected to be made redundant, which is likely to make unemployment rise sharply.