THE UK's unemployment rate has soared to its highest level for more than four years as official figures showed nearly 830,000 workers have been dropped from payrolls since the start of the pandemic.

The Office for National Statistics (ONS) revealed the unemployment rate reached 5% in the three months to November for the first time since early 2016 after another 202,000 people lost their jobs.

Figures for December also showed there were 828,000 fewer people on company payrolls since before the crisis struck last February as the pandemic has hammered the jobs market.

Experts warned that there would be further pain to come after the latest lockdown rips through the labour market.

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Meanwhile, Scotland recorded a slight increase in employment since the last quarter.

The ONS said the employment rate for those aged 16 to 64 between September and November was 74.4%, a 0.5% increase on the figure for the previous quarter.

In comparison with other areas of the UK , it was the joint largest increase in the rate estimates for the period along with the South West of England.

Meanwhile, the unemployment rate among those aged 16 and over in Scotland was 4.4% – 0.1% down on June to August.

Business Minister Jamie Hepburn stressed that the figures "still do not reflect the full impact of coronavirus or outlook for employment as the Job Retention Scheme continues to play an important role in supporting employers and employees".

He went on: “Combined with the huge economic uncertainty caused by Brexit, this remains an extremely uncertain time for the economy and jobs.

“The Scottish Government continues to support employers, allocating over £3 billion to help businesses since the start of this pandemic."

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Discussing the UK-wide figures ONS head of economic statistics Sam Beckett said: “In the three months to November, on our survey data, the employment rate fell sharply again, while the unemployment rate rose to hit 5% for the first time in over four years.

“The number of people saying they had been made redundant in the previous three months remains at a record high.

“Meanwhile, vacancies, which were rising in summer and early autumn, have been falling in the last couple of months.”

The gloomy unemployment figures come despite signs that the UK Government’s move to extend the furlough scheme to April has helped cushion the blow.

The number of payroll employees nudged up by 0.2% between November and December, with employment also falling at its slowest pace since March, down 88,000 at 32.5 million.

But there was little cheer in the data as the claimant count, which includes people working with low income and hours as well as people who are not working, edged up by 0.3% in December to 2.6 million.

The redundancy rate hit another record high, up 168,000 between September and November to 395,000, though it dropped slightly from a peak in September.

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The early recovery in vacancies seen in the summer also slowed, with around 81,000 between October and December at 578,000 – half the level of growth in the previous three months.

Business leaders reiterated calls to Chancellor Rishi Sunak to extend support measures further to help sectors on life support during the lockdown, such as the hospitality industry and high street.

The SNP's shadow chancellor, Alison Thewliss, urged Sunak to plug the gaps in support following the publication of the new figures. 

The Glasgow Central MP said: "The sharp rise in UK unemployment and redundancies must be an urgent wake up call for the Tory Government - who have left millions behind during the coronavirus pandemic.

"The Chancellor must not repeat the same mistakes all over again. It is crucial that he moves quickly to plug the gaps in support and extend the furlough scheme to prevent a cliff edge.

"The long-term damage of a hard Brexit will make the Tory unemployment crisis even worse - so it is crucial that the UK Government introduces a major fiscal stimulus of at least £98billion, on a par with other countries, to protect jobs, boost incomes and support our public services.

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"This must include a package of support for the 3million excluded, a U-turn on Tory plans to cut Universal Credit and freeze public sector pay, and more grant and flexible loan support for businesses - including the missing £375million that was promised to Scottish firms before the UK Government backtracked."

Yesterday more than a further 20,000 retail jobs were put at risk after online retailer Boohoo announced a deal to buy the Debenhams brand and rival Asos said it was poised to buy Topshop.

Tej Parikh, chief economist at the Institute of Directors, said: “It is now crucial that the Job Retention Scheme and other Covid-19 economic support is extended beyond the spring to support employment as restrictions continue.

“The latest lockdown will have only added further pressure on firms with troubled balance sheets, which means more jobs are likely to be lost in the coming months.”