With recession looming, companies in the UK are closing down their business fast and laying off people, giving rise to increase in unemployment to a new alarming rate.

The economic downturn has gone from bad to worse, and with the trend, it is likely that the job loss in UK could hit a million when Christmas comes in December.

The unemployment rate has been the sharpest increase since the last 16 years. Similarly, the number of people applying for the unemployment benefit has risen by 32,500, a number only matched by the bad recession in 1992.

In August, the number of job loss recorded a 6-digit figure of 110,000, the first time such digit was achieved. The August loss, combined with the previous losses, make up a staggering total of 900,000 job redundancies overall. And as the economy continues to plunge downwards, it will only be a matter of time the magic figure of one million is hit.

Workers in banking, manufacturing and services sectors are the worst affected.

On the other hand, while companies are still hiring, it is moving at a snail’s pace and the number of job vacancies made available has gone down significantly by some 15%. It is clear that at the moment, companies are reluctant to hire more staff, and even if they do, they’ve been very selective in getting only the right candidates for the job.

When told that their company has gone under, Lehman Brothers’ employees in the UK packed their stuff and went home, seemingly resigned to the fate that they won’t see their September salary.

That means many of them would not enough money to cover their range of usual expenses including mortgage, hire purchase, rent, food and groceries, and other expenses.

However, all is not lost after the company’s administrator, PricewaterhouseCoopers (PwC) which took over the management promised the 4,000 odd workers will be duly paid their salary. The employees have also been asked to come back to office and complete the month.

The only slight hiccup is that instead of getting the salary payment on the usual third week cycle (around 20th of the month), the workers will get their earning a little bit late, but effort is being made to ensure the staff are paid before the 30th September. No decision has been made on bonus, but from the look of things, bonus give outs are unlikely occasion.

When PwC first stepped into the office, the audit firm was unable to find enough cash, and was seemingly short of $75 million required to settle the September wages. It sparked panic until the winding down of several key positions started to generate some cash flow.