The government’s furlough scheme and a recovering economy failed to prevent record redundancies in the period before tougher lockdown restrictions were imposed, according to the latest official data. Figures from the Office for National Statistics showed that young people have been the hardest hit by mounting job losses, with an unemployment rate three times the national average. The ONS said a record 314,000 people lost their job in the three months to September – a period in which the Treasury’s wage subsidy scheme became less generous. The ONS said the 181,000 quarterly increase in redundancies was unprecedented and helped push up the UK unemployment rate from 4.1% to 4.8% between the second and third quarters of 2020. Between August and September, the unemployment rate jumped by 0.3 points. Young people have been particularly hard hit by measures to contain the coronavirus because they tend to work in the sectors most affected by social distancing restrictions – such as hospitality, retailing and leisure. The ONS said the jobless rate for the under-25s stood at 14.6%. Flash estimates of the state of the labour market in October suggested there was a further 33,000 drop in the number of employees on payrolls, leaving headcounts 782,000 lower than they were when the Covid-19 crisis began in March. Speaking on Channel 4 News, the Bank of England’s chief economist, Andy Haldane, said he was concerned that soaring rates of unemployment would increase the gap between the generations and widen regional disparities. “Levelling up was a priority. It is now a necessity,” he said. “It’s likely we will not see a levelling up, but the opposite by dint of the Covid crisis”. Before the Covid-19 crisis, the unemployment rate was below 4% – its lowest level since the mid-1970s. While the furlough has helped limit the increase in joblessness, the ONS said its latest estimates showed 1.62 million people were unemployed in the July to September period of 2020, up 243,000 on the quarter and 318,000 on the year. The gradual opening up of the economy in the summer meant the number of job vacancies rose by 146,000 over the three months to October to 525,000, but the total was still down by 278,000 on a year earlier. The chancellor, Rishi Sunak, said: “Today’s figures underline the scale of the challenge we’re facing. I know that this is a tough time for those who have sadly already lost their jobs, and I want to reassure anyone that is worried about the coming winter months that we will continue to support those affected and protect the lives and livelihoods of people across this country.” Sunak said the government’s decision to extend the furlough scheme until March in response to the reimposition of lockdown restrictions in England would “protect millions of jobs across the UK and support people to continue to provide for their families”. The ONS’s labour force survey showed a 164,000 decline in employment in the three months to September – slightly bigger than the City had been expecting. Experimental ONS data found by the final week of September the unemployment rate had climbed to 5.1%. Frances O’Grady, the general secretary of trade union body the TUC, said: “People who have lost their jobs must get the support they need to make ends meet. We need an urgent boost to universal credit or many risk being plunged into poverty.” Jonathan Athow, the ONS deputy national statistician for economic statistics, said: “Unemployment grew sharply in the three months to September, with many of those who lost their jobs earlier in the pandemic beginning to look for work again. The number of redundancies has also reached a record high. “Vacancies continued to recover from the very low numbers seen earlier in the year. However, these figures predate the reintroduction of restrictions in many parts of the UK.” Ruth Gregory, a UK economist at consultancy Capital Economics, said further increases in unemployment were in prospect, predicting that the jobless rate would peak at 9% following the end of the furlough scheme next spring.