COVID-19 impact | UK unemployment hits 5.0% on virus fallout

In this file photo taken on December 31, 2020, a UK border sign welcomes passengers on arrival at Heathrow airport in west London. (PC-AFP)

Britain's unemployment rate hit 5.0 percent at the end of 2020, the highest level for more than four-and-a-half years, as coronavirus lockdowns destroyed jobs, official data showed Tuesday.

The rate for the three months to the end of November compares with 4.9 percent in the quarter to October, the Office for National Statistics said in a statement.

At 5.0 percent, the figure is 1.2 percentage points above the same period a year earlier, to reach the highest level since April 2016, the ONS added.

World lost equivalent of 255 million jobs in 2020: United Nations

"This crisis has gone on far longer than any of us hoped -- and every job lost as a result is a tragedy," finance minister Rishi Sunak said.

Analysts expect unemployment to surge further when the UK government's furlough scheme paying the bulk of wages for millions of private-sector workers stops at the end of April.

ONS head of economic statistics Sam Beckett noted that job "vacancies, which were rising in summer and early autumn, have been falling in the last couple of months".

The ONS added that between February last year, ahead of Britain's first lockdown, and December, the number of payroll employees dived by 828,000.

The data comes one day after administrators for collapsed UK department store chain Debenhams said it planned to shut all its outlets, costing around 12,000 jobs.

While Debenhams had struggled with fierce online competition long before the coronavirus pandemic, Britain's bricks-and-mortar retailers are in turmoil after a series of lockdowns.

It is far from clear when Prime Minister Boris Johnson will lift the current lockdown, with suggestions that it may not occur until around Easter.

The UK government is meanwhile faced with growing pressure to detail a strategy to reopen schools in England, following a backlash from lawmakers about reports they could remain closed for months.

As for unemployment, "the labour market will probably continue to weaken over the rest of this year, especially once the furlough scheme finishes", Capital Economics analyst Thomas Pugh said.

Financial researchers, the EY ITEM Club, predicted that the unemployment rate could shoot up to 7.0 percent by the middle of the year, though that would still represent a better outcome than first expected.

"This peak is both lower and later than had been expected before the furlough scheme was extended beyond its original ending date of October 2020," it said in a note to clients.

It is believed that Sunak does not want a further extension, with UK government borrowing soaring by unprecedented amounts.