The planned tightening of the benefits system is “deeply concerning” and could have “serious negative consequences” on claimants’ mental health, according to a leading body representing psychologists in the UK.

The warning from the British Psychological Society (BPS) comes after work and pensions secretary Therese Coffey last month hailed a new government target to get 500,000 jobseekers back into work by June.

Under the existing benefits rules, individuals claiming universal credit while looking for work are given three months to find a job in their preferred sector – or face the possibility of sanctions.

But under changes expected to be ushered in next month, claimants will have to apply for roles outside their area after just four weeks. They risk having their benefits cut if they are deemed not to be making “reasonable efforts” to secure a job in any sector.

Ms Coffey said the move would ensure people can get “any job now” while critics warned it would force some skilled workers to accept insecure, short-term employment.

One in five firms plan on letting staff go in response to Sunday’s furlough policy change, which will see employers contribute more, a survey has found.

The British Chamber of Commerce said extra training was needed to deal with thousands of redundancies predicted.

From Sunday, government payments reduce to 60% towards salaries, with employers paying 20%.

The government said the approach was “right” and meant “we can focus support elsewhere” as the economy recovers.

According to the most recent figures up to 30 June, about 1.9m workers were on furlough, down from a peak of 5.1m in January.

The government said 11.6 million jobs have been supported since the Job Retention Scheme launched in April 2020.

The scheme is due to close at the end of September.

Thousands of work coaches will be hired under a new government employment programme to help those who have lost their jobs during the pandemic, amid fresh warnings of an unemployment crisis as the furlough scheme ends.

The £238m job entry targeted support (Jets) scheme will help jobseekers who have been out of work for at least three months. It will be available to people receiving the “all work related requirements” universal credit payment, or the new style jobseeker’s allowance.

The Department for Work and Pensions says Jets will “ramp up support” to help people back to employment, with specialist advice on how to move into growing sectors, as well as CV and interview coaching. It is recruiting an additional 13,500 coaches to help deliver the programme.

The move comes as economists forecast a sharp increase in unemployment this winter, with employers such as Rolls-Royce, Marks & Spencer, Debenhams, Boots and John Lewis all announcing layoffs since the pandemic began. More than a third of businesses plan to cut jobs before the end of the year, a survey last week found.

The chancellor, Rishi Sunak, who will give a speech to the Conservative party conference on Monday, said: “Our unprecedented support has protected millions of livelihoods and businesses since the start of the pandemic, but I’ve always been clear that we can’t save every job.

Unemployment in the UK fell by 57,000 in the three months to June, official figures show, bringing the jobless rate down to 4.4% – its lowest since 1975.

The squeeze on real incomes continues to grow, though at a slower pace.

Average weekly earnings increased by 2.1% compared with a year earlier – slightly higher than last month’s 2% increase.

But with inflation standing at 2.6%, real earnings still fell by 0.5%, the ONS figures showed.

At 75.1%, the proportion of people in work is the highest it has been since 1971 – partly due to the introduction of a later state pension age for women.

There were 32.07 million people in work in the three months to June – 338,000 more than for the same period last year.

Official figures released today show that the unemployment rate has fallen to 4.7% – the lowest level in 12 years.

The Office for National Statistics (ONS) has confirmed that employment continues to run at a record high rate of 74.6%, with 31.85 million people in work – an increase of 315,000 on the year and more than 2.8 million since 2010.

The rise in employment continues to be driven by full-time work. Meanwhile, average weekly wages grew by 2.2% over the last year.

Britain enjoyed a bumper pay rise in spring, with average earnings 3.2% higher in the period from March to May 2015 than a year earlier, highlighting the increasing skills shortages forcing employers to offer higher wages.

But the better earnings figures, from the Office for National Statistics, came as unemployment rose for the first time in two years, sparking fears that Britain’s booming labour market has lost some of its momentum.

Employment also fell for the first time in two years, dragged down by the government’s continued austerity programme that has forced 22,000 public sector job cuts since December and 59,000 since May last year.

James Knightley, UK economist at ING, said: “This is the first fall in employment since March 2013 and the first rise in the unemployment rate since December 2013.

Unemployment fell last month as Britain’s economy added jobs at an unprecedented pace, according to official figures. But the recovery failed to lift wages by more than a fraction, leaving workers suffering another real-terms cut in living standards.

The jobless rate fell to 6.5% of the workforce, while the number of people in work edged higher to a fresh record of 30.6 million. The proportion of those aged 16 to 64 in work reached 73.1% in the three months to May, a rate only equalled before in 2004-5 and in 1974.

But a 0.7% rise in wages, excluding bonuses, was well short of the 1.5% May inflation rate. With bonuses factored in, wage growth was only 0.3%.

Average wage rises have remained stubbornly below inflation during the recovery and forecasters have repeatedly predicted an imminent return to above-inflation rises in wages over the last year only for each month’s official figures to prove them wrong. A rise in inflation last month to 1.9% and the fall in total average wage increases from 0.8% to 0.3% appeared to show the situation worsening.

Britain’s jobs boom accelerated in the first three months of the year as unemployment reached a five-year low, fuelled by a surge in self-employed workers.

Employment accelerated at the fastest pace in 43 years to reach 30.4 million people, after the number of those in work jumped by 283,000 over the last three months. However, the business secretary, Vince Cable, said the figures were a warning that the UK labour market was becoming too flexible.

Much of the demand appeared to be for low-paid work after figures showed the rise in the number of self-employed people since last summer kept up its strong run. The number of self-employed people in the UK has risen by 375,000 since March 2013 to nearly 4.6 million, according to the latest Office for National Statistics data, outstripping the 351,000-strong increase in full- and part-time employees in the private and public sectors.

Meanwhile, the unemployment rate fell to 6.8% from the 6.9% announced last month, the lowest since February 2009.

The underlying employment trends could delay the Bank of England’s first hike in interest rates, with studies showing that pay levels among the self-employed are around 40% lower than for employed people and are dragging down average pay rates.

Figures from the Office for National Statistics show the number of people out of
work has risen by 70,000 between December and February to 2.56 million – the
worst quarterly rise since Autumn 2011 – giving the UK an unemployment rate of
7.9%. Interestingly, the ONS has attributed the rise to the number of women
re-entering the labour market, becoming “unemployed” when they were previously
classed as “economically inactive”.

However, and rather depressingly, 449,000 people have been out of work for more than two years, up by 6,000, while 904,000 have been jobless for more than a year, unchanged from the previous quarter. In addition to this being viewed as good news,  the figures themselves don’t  tell us anything about quality of life or account for non-monetarised costs and benefits such as the quality of the jobs were are talking about (e.g. work-life balance, promotion opportunities, debt). In the context of rural England, it is interesting not only to reflect on how people are living on declining incomes as  public sector spending reductions lead to job losses and reductions which cannot easily be shifted to the private sector; and where many people have 2 or 3 jobs just to make ends meet.

Not that this is an issue which is unique to the UK. I spoke to the OECD standing Committee on rural issues last week in Paris. Under employment arising from what is now being internationallly characterised as “The Crisis” (the economic collapse in 2008 and its aftermath) is perceived by them as the main challenge to sustainability across the world.