More than 695,000 jobs have been lost since the pandemic started hitting the UK, according to the latest figures.
The Office for National Statistics (ONS) said the unemployment rate rose as 36,000 other jobs were cut from payrolls across the country.
Meanwhile, unemployment rose from 104,000 to 1.4 million for the three months ending in July.
This brings the total unemployment rate to 4.1%, as unions warn of a tsunami of layoffs as the holidays end next month.
The figures are for the three months from May to July and are worse than the June quarter when the rate was 3.9%.
The Bureau of National Statistics said young workers have been particularly affected by the pandemic.
The ONS said: “Looking more closely at unemployment by age, the estimated number of unemployed 16-24 year olds increased by 76,000 per year to 563,000. Other age groups have seen declines. or very little change over the year. “
He said retail, aerospace, tourism, aviation and media were among the sectors most affected.
ONS Director of Economic Statistics Darren Morgan added: “Some effects of the pandemic on the labor market began to wear off in July with parts of the economy reopening. Fewer workers were in. leave and the average number of hours increased.The number of vacancies continued to recover also in August.
“Nonetheless, with the number of employees on the payroll falling again in August and unemployment and layoffs rising sharply in July, it is clear that the coronavirus is still having a significant impact on the world of work.”
Since March, the state has supported around 9.6 million jobs through the time off program, which is slated to be phased out on October 31.
However, Chancellor Rishi Sunak has repeatedly rejected calls for an extension, despite the introduction of the $ 9 billion program to “protect” jobs.
It has raised fears of yet another bloodbath of layoffs before Christmas as employers struggle to recover from the pandemic.
“It is a difficult time for many as the pandemic continues to have a profound impact on jobs and people’s livelihoods. That’s why protecting jobs and helping people get back to work remains my number one priority.
We have taken decisive action throughout this crisis, introducing the holiday program and presenting a comprehensive employment plan to support, protect and create opportunities. Well, continue to do so through the fall, including helping people get back to work with policies like our up to $ 9 billion retention bonus. “
The numbers come as Labor leader Sir Keir Starmer is due to re-call on ministers to come up with new measures to protect jobs when the coronavirus leave program ends.
In a speech to the TUC annual convention on Tuesday, Sir Keir will warn communities across the country will face the “healing effect of mass unemployment” if the government does not act.
He will propose to work with the ministers to develop a “real national plan” to protect jobs when the system is closed at the end of October.
The Labor leader will deliver his speech online, rather than addressing delegates in London in person, as he is self-isolating after a family member develops possible symptoms of Covid-19.
While Labor has said it accepts that the leave program cannot continue indefinitely, Sir Keir will argue that with “a little imagination” the government can continue to help those most at risk of losing their jobs .
He will urge ministers to target sectors under the greatest pressure – including aviation and retail, as well as businesses in areas affected by local lockdowns.
Sir Keir will also call for an expansion of part-time work – rewarding employers who give people hours rather than cutting jobs – and the provision of training and support for those who cannot return to full work. time.
“At this time of national crisis, we must draw inspiration from our past,” he should say.
“Be prepared to put aside the differences between the parties and work together in the best interests of the country.
“Imagine how powerful it would be if we could form a real national plan to protect jobs, create new ones and invest in skills and training?
“I’m making an open offer to the Prime Minister – work with us to keep millions of people working.”
Sir Keir will also call on ministers to ban “layoff and rehire” – when people are notified of layoffs and then rehired with worse wages and conditions.
“These tactics punish good employers, hit workers hard and hurt our economy,” he should say.
“After a decade of wage cuts, this is the last thing workers need, and in the midst of a deep recession, this is the last thing our economy needs.
A spokesperson for HM Treasury said: “We already have a national plan to not only protect jobs, but to create new ones – and we are implementing it now.
“Thousands of young people will be taking their first steps into the world of work with our $ 2 billion kickstart program this fall, and our up to $ 9 billion job retention bonus will help businesses bring people back to work on leave.
Jonathan Reynolds, MP, Secretary for Shadow Work and Pensions, added: “These new figures are deeply concerning, more than 5 million people are not working and 2.5 million have been out of work for three months or more.
“Unemployment will continue to rise unless the government acts now and takes a more flexible approach targeted at the sectors that need it most.”