The number of people on unemployment-related benefits in the UK has reached 2.7 million – an increase of 120% since the beginning of the coronavirus lockdown, according to the Office for National Statistics.

In the three months from the end of March to July, unemployment increased by 62,000 to 1.4 million, making the rate of unemployment increasing to 4.1%.

It marks the first time the jobless rate has increased since the start of the coronavirus pandemic.

Figures also showed the number of people on payrolls shrank by 695,000 between March and August due to the impact of the pandemic, as employers cut jobs ahead of the winding down of the government’s Job Retention Scheme.

The rise in unemployment has particularly impacted young workers, with an increase of 76,000 in the number of unemployed young people aged between 16 and 24 over the past year, the ONS said. 

ONS director of economic statistics Darren Morgan said: “Some effects of the pandemic on the labour market were beginning to unwind in July as parts of the economy reopened.

“Fewer workers were away on furlough and average hours rose.

“The number of job vacancies continued to recover into August, too.

“Nonetheless, with the number of employees on the payroll down again in August and both unemployment and redundancies sharply up in July, it is clear that coronavirus is still having a big impact on the world of work.”

The claimant count – those on unemployment benefits – also includes people who can claim Universal Credit or Jobseeker’s Allowance while receiving low earnings from part-time work.