Wednesday, October 28, 2020

COVID drives redundancies at fastest rate since financial crash

Redundancies in the UK have risen at their fastest rate since the 2009 financial crisis as the coronavirus pandemic continues to impact the economy.

According to figures from the Office for National Statistics (ONS), 156,000 people were made redundant  in the three months to July – an increase of 48,000 from the three months to the end of May and the biggest quarterly increase since 2009.

With the end of furlough rapidly approaching, there are major concerns that unemployment levels will continue to spike.

ONS said that early indicators from HMRC showed almost 700,000 workers had dropped from company payrolls since the beginning of the pandemic back in March. Young workers make up the majority of these job losses.

BCC Head of Economics Suren Thiru said: “Despite the slight rise in the unemployment rate, the furlough scheme continues to limit the pandemic’s full impact on headline job figures.

“However, the decline in employees on payrolls and the rise in the claimant count in August as the furlough scheme began to taper is a clear warning that the full impact of Coronavirus on the UK labour market is yet to come.

“While there was a rise in the number of job vacancies, this is more likely to reflect a temporary bounce as the economy gradually opened, rather than a meaningful upturn in demand for labour.

“With many firms are still facing waves of cash flow problems, rising costs and an uncertain economic outlook, it is probable that unemployment will escalate sharply as government support winds down.

“To help avoid a damaging cliff edge for jobs more must be done help firms keep staff on through this deeply challenging period. This should include a significant cut in employer National Insurance Contributions and more substantial support for firms placed under local lockdowns.”

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