SCOTLAND'S unemployment rate is now the highest among all the UK nations, official figures have revealed.

Unemployment in Scotland is now running at 4.6%, compared with a UK rate of 3.9%, which business leaders say "should set alarm bells ringing".

New figures from the Office of National Statistics show that the unemployment rate in England, Wales and Northern Ireland is 3.9%, 3% and 2.3% respectively.

Unemployment in Scotland rose by 30,000 to 127,000 between February and April as lockdown hit the labour market.

Scotland's unemployment rate is now at its highest level for over three years.

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Economy Secretary Fiona Hyslop said the country's reliance on the tourism industry was the main reason behind the rise in the Scottish unemployment rate.

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"The scale of what's coming down the track will be far, far more than we've seen here and that is why the scale of the response has to equal that challenge," she said.

Citiizens Advice Scotland warned that the new figures "may be the tip of the iceberg" to the state of the economy later in the year as the furlough scheme winds down and industries face reduced demand.

CAS's social justice spokesman Mhoraig Green said: “People who find they have no job to return to after furlough will be entering a difficult jobs market.

“It’s essential both the Scottish and UK governments look at ways to grow our economy in a way that creates fair paying, secure work.

“That’s why CAS has called for more investment in energy efficient housing as a measure that could create jobs, as well as making state support for business contingent on fair work practices.

“The whole UK may be facing an economic storm in the months to come. It’s vital that the most vulnerable aren’t swept into deeper poverty as a result.”

Andrew McRae, FSB’s Scotland policy chairman, said: “Today’s figures should set alarm bells ringing in the corridors of power. That’s because they show unemployment rising even with support measures such as the furloughing scheme in place.

“To ensure that the worst predictions for joblessness in Scotland don’t come to pass, we’ll need governments in Edinburgh and London to help local firms get back to business and create jobs. The government must prevent a situation where measures to protect jobs are withdrawn but workers, consumers and firms still face lockdown conditions.

“After the last crash, nine in ten unemployed people that re-joined the workforce did so via a small business or though self-employment. That’s why we want to see the Scottish Government put the jobs potential of local firms at the heart of their plans for recovery. In addition we’re urging the UK Government lower the cost of employment by reducing employer’s national insurance contributions.”

Business, Fair Work and Skills minister Jamie Hepburn said the figures "show clearly the scale of the challenge" facing Scotland as a result of the coronavirus pandemic.

He added: "I know that many people will be feeling a deep sense of anxiety about their livelihoods. Keeping people in work while supporting those who have lost their jobs will continue to be at the heart of our thinking as we carefully reopen the economy."

Mr Hepburn also urged the UK government to ensure its support schemes reflected what was needed in Scotland.

"Failure to do so will put the economy at a competitive disadvantage in recovering from this crisis, and could result in additional job losses. We must not allow that to happen," he added.

Across the UK, the number of workers on UK payrolls dropped by more than 600,000 between March and May, official figures suggest.

Meanwhile, the number of people claiming work-related benefits - which includes the unemployed - was up 126% to 2.8 million.

The early estimates reflect the impact of around six weeks of lockdown in which large parts of the UK were shut.