ONS figures: Unemployment rate soars to highest level for more than four years

READ MORE: ONS figures: Scotland shows slight increase in employment

Figures for December also showed across the UK that there were 828,000 fewer employees on company payrolls since before the crisis struck last February as the pandemic has impacted the jobs market.

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

READ MORE: Lockdown pushing many to the brink as one in five Scots now classed as being in poverty

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 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.

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.

READ MORE: Coronavirus Scotland: Daily Covid cases and deaths in your area

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.

On Monday alone, 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.”

Commenting on the latest official labour market statistics Minister for Business, Fair Work and Skills Jamie Hepburn said: “For September to November 2020, Scotland’s employment rate estimate has increased over the quarter to 74.4% and the unemployment rate estimate has decreased over the quarter to 4.4%.

“HMRC early estimates for December 2020 for Scotland, also published this morning, show that there were 2.3 million payrolled employees in Scotland , increasing by 9,000 compared with November, however 67,000 lower than a year ago.

“These figures still do not reflect the full impact of coronavirus (COVID-19) or outlook for employment as the Job Retention Scheme continues to play an important role in supporting employers and employees. 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.

“This is in addition to our £60 million Young Person’s Guarantee, giving every young person across Scotland aged between 16 and 24 the opportunity of work, education or training. Meanwhile, the £25 million National Transition Training Fund will help up to 10,000 people aged 25 and over, who have lost their jobs or are at risk of redundancy as a result of this crisis, to develop the skills required to move into sectors with the greatest potential for future growth and job opportunities, such as green technologies.

“We are taking every step within our power to create a stronger, more resilient, sustainable economy for Scotland and this week the Finance Secretary will set out the next budget which will outline our plans to support the Scottish economy going forward.”

Matthew Percival, director of people and skills at the CBI business group, said the Chancellor must “act now”.

“The Job Retention Scheme needs to run to at least the end of June to avoid a cliff-edge,” he said.

UK Employment Minister Mims Davies said: “Whilst there is light at the end of the tunnel with jabs already in the arms of millions and the vaccine rollout gathering pace, our Plan for Jobs is helping to protect and support livelihoods, as well as create new opportunities for those who need them.”