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Redundancies Amongst the Over 50s Nearly Tripled in a Year

Redundancies amongst the over 50s have increased by 195% in a year, with the level and rate both higher than any other age group, according to new analysis of official ONS statistics from Rest Less, the digital community for the over 50s.

Rest Less’s analysis of the latest data produced by the Office of National Statistics shows that nationally, redundancies hit a pandemic peak of 395,000 in September to November 2020. Whilst redundancy levels have fallen nationally by 22% since the peak, they are falling more slowly amongst older workers.

Stuart Lewis, Founder of Rest Less, commented on the analysis: “While there are plenty of reasons to be optimistic about the economy starting to open up, it’s clear that businesses are far from out of the woods yet, with many still struggling to survive and the level of redundancies remaining historically high.

‘Whilst the extra extension to the furlough scheme has stemmed the flow of redundancies for now, redundancy rates amongst the over 50s remain stubbornly high and are the highest of all age groups.

‘With an estimated 1.3 million workers over the age of 50 still on furlough, there is a very real danger of a tsunami of redundancies amongst workers in their 50s and 60s when struggling employers are required to increase their contribution to the furlough scheme from July.

‘This is of concern to all of us, as previous research has shown that once unemployed, workers over the age of 50 are two and a half times more likely to drift into long term unemployment than their younger counterparts due to a mix of age discrimination in the recruitment process and a lack of accessibility to tailored retraining programmes.

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‘With the state pension now standing at 66 for both men and women, without more tailored Government support – similar to the scale and breadth of initiatives being put in place for younger workers – large-scale, long-term unemployment of this talented section of the population risks removing the engine room of growth for the entire UK economy.”

Kim Chaplain, Associate Director – Work, from the from the Centre for Ageing Better, commented: “These figures show just how devastating the impact of the pandemic has been on over-50s, with over 100,000 made redundant between November and January alone.

“This is particularly worrying because we know that over 50s, are likely to struggle more than any other group to get back into work – so we risk seeing many of these people leaving the workforce for good.

“In the months ahead, it’s vital that we build back a multigenerational workforce. Our economy needs both the direct contribution of experienced older workers and the support they provide to other, less experienced groups.

“We need to see targeted employment support to help over-50s back to work, and a strong message from government that not only is this group just as entitled to work as younger workers, they also provide a valuable contribution we cannot afford to lose.”

By Nigel Barlow

Source: About Manchester

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UK economy set for a significant boost, new figures show

The UK economy is set for a significant boost as UK mid-sized businesses emerge from a winter of lockdowns and restrictions with plans to invest and recruit, according to new figures published today.

According to the data from accountancy and advisory firm, BDO, medium-sized businesses are set to spearhead the UK’s economic recovery with three quarters (75%) of mid-tier businesses stating that 2021 is the time to invest, and over a quarter (26%) already planning to invest in new locations or M&A.

BDO surveyed leaders from 500 medium-sized businesses across the UK to uncover their plans for the year as the UK progresses with its rapid vaccine rollout programme.

Hinting at some early signs of recovery, 86% of UK mid-tier businesses are looking to recruit more staff over the next six months, with over half (54%) planning permanent appointments. Almost three quarters of businesses based in Yorkshire and the Humber, as well as Central South (73%), will add permanent staff to their ranks.

The Government’s £3,000 apprenticeship grant also provided a boost, with over a third (36%) of businesses stating they would now hire apprentices as a direct result of this incentive. This came as part of a larger 70% of businesses planning to recruit in this area regardless of the incentive.

News of investment in apprenticeships will be welcomed by many, with recent data from the ONS revealing that those under the age of 25 account for more than two thirds of job losses since the start of the pandemic.

Businesses believe they are well supported by the Government for the year ahead. 73% agreed the Chancellor promised enough to support the regional “levelling up” agenda in his March budget, while 59% believe that their region will be given enough financial support over the next 12 months as a direct result of the pandemic.

Investment plans also received a boost in the March budget. Nearly half of businesses (47%) are planning new investments following the “super deduction” initiative, which allows companies to cut their tax bill by up to 25p for every £1 they invest.

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There is cause for further optimism as three quarters of businesses (75%) expect revenues to return to pre-pandemic levels within a year of the strictest restrictions being lifted.

That said, few businesses have come away from the crisis unscathed. Over a third (38%) of businesses stated that their business model or product line will change in light of the pandemic. Another third (33%) expect pricing of products and services to increase, likely reflecting a need to pay back debt or recover higher costs.

Reflecting on the findings Ed Dwan, Partner at BDO, commented: “Mid-sized businesses are the engine of the economy; they have often proven robust even during the most uncertain economic conditions. The resilience they have demonstrated over the past year will mean they are well-placed to benefit from the vaccine roll-out and gradual lifting of restrictions. Ultimately these businesses will drive the UK’s economic recovery forward.

“However, the strength of the mid-market economy can’t be taken for granted. The results show that Government support has been vital for this segment of the UK economy so far, but areas such as access to finance and support on supply chain disruption will be crucial in creating an environment that allows these businesses to thrive.”

Mid-sized, PE owned and AIM listed businesses, what BDO calls the economic engine, account for less than 1% of businesses overall but contribute £1.4tn in revenues and provide one in four jobs. In the five years leading up to the start of the pandemic, these businesses grew revenues by 46% despite Brexit-related uncertainty.

The role of the economic engine in the UK’s wider economic recovery should not be overlooked. In 2015, the CBI estimated that the growth of just 3,000 mid-sized firms from 2010 to 2013 was enough to drag the country out of recession and into growth after the financial crash. If more firms had rebounded quickly and hit pre-recession growth rates, then it could have added tens of billions of pounds to the UK economy.

By: Barney Cotton

Source: Business Leader

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2020 worst year on record for UK economy

The UK economy suffered a steeper contraction during the first coronavirus lockdown but bounced back more strongly than previously thought at the end of 2020, according to official figures.

The Office for National Statistics (ONS) said gross domestic product (GDP) – a measure of the size of the economy – shrank by even more than first forecast between April and June last year – plummeting by 19.5% against the 19% initial estimate.

However, in a raft of revisions to previous figures, the ONS said the UK economy rebounded by 16.9% and 1.3% in the third and fourth quarters of 2020 respectively.

This marked steep increases on the 16.1% and 1% previous estimates.

The widespread revisions left GDP plummeting by 9.8% overall in 2020, against the 9.9% first pencilled in, but still the worst annual performance for more than 300 years.

Jonathan Athow, deputy national statistician at the ONS, said: “Our revised quarterly figures show the economy shrank a little more than previously estimated in the initial stages of the pandemic, before recovering slightly more strongly in the second half of last year.

“However, these new estimates paint the same overall picture as before, with historically large falls in GDP in the spring, followed by a recovery in the summer and autumn.”

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Due to the upward revision to figures for the final three months of 2020, the level of GDP was 7.3% below that of a year earlier, against a previous estimate of 7.8%, according to the ONS.

The 9.8% annual drop marks the steepest since official records began, while historical figures from the Bank of England suggest it is the biggest contraction since the Great Frost of 1709.

But the ONS stressed that its GDP estimates are “subject to more uncertainty than usual” and likely to have larger-than-normal revisions due to the challenges of collecting data in the pandemic.

The UK economy suffered among the largest contractions of all the countries in the Organisation for Economic Co-operation and Development (OECD), with only Spain and Argentina seeing steeper falls.

Recent monthly figures from the ONS also show that the third English lockdown sent GDP plunging 2.9% in January, though this was better than feared by experts.

Howard Archer, chief economic adviser to the EY Item Club, said he is now pencilling in a hit of just over 1% overall in the first quarter of 2021, compared with 3.4% previously forecast as the economy proves more resilient to lockdown disruption.

He added that data in the latest ONS release showing a rise in the household savings ratio to 16.1% between October and December and a record 16.3% over 2020 “suggests consumers overall are in a good position to spend as restrictions ease through the second quarter”.

In separate figures also released on Wednesday, the ONS said the UK current account deficit – the difference between the value of the goods and services the UK imports and the goods and services it exports – widened to £26.3 billion in the fourth quarter of 2020.

This is equivalent to 4.8% of Britain’s GDP and is almost twice the level seen in the previous three months as firms stockpiled imports ahead of the December 31 Brexit deadline.

Source: Irvine Times

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Furlough scheme has cushioned Covid blow, but job losses loom

It is clear from the latest unemployment figures that the furlough scheme is working. With more than 5 million people on the government’s main wage subsidy, it has proved its worth yet again as a method of job protection, cushioning the blow from the pandemic as the UK entered a third lockdown.

Thousands of British companies have learned from the first two lockdowns. They have adapted to life online and kept goods and services moving, albeit mostly within the boundaries of the UK after the government left exporters to deal with the worst possible exit from the EU short of leaving without a deal.

Larger companies especially have looked ahead to a time when restrictions are lifted and opportunities for improved sales present themselves again.

But that is where the good news ends for the jobs market. If we look at the figures produced by the Office for National Statistics for the three months to the end of January, the fall in the unemployment rate to 5% from 5.1% is not so cheery.

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The data shows that most of the ups and downs in the rate can be attributed to the short-term decisions of employers that operate in the worst affected industries.

Students who would normally have worked in the hospitality sector have not signed on as unemployed, they have disappeared from the employment register altogether. This has the effect, along with other young people who give up trying to find a job, of bringing down total participation rate to 79% in the three months to January, its lowest level since August 2019.

It shows, said Tony Wilson, the head of the Institute for Employment Studies, that new hiring by companies outside the very largest firms is continuing to fall back and all of the improvement is being driven by fewer people leaving work rather than more people getting new jobs.

“This is proving to be a disaster for young people, who now account for nearly two-thirds of the fall in employment and none of the recent growth,” he said.

Then there are the number of workers not being paid while their job is on hold, which has climbed from 200,000 to more than 300,000.

It is likely that the lower rate of redundancies in the three months to January of 11%, down from a peak of 14.2% in November, can be attributed to greater use of the furlough scheme.

It shows the lockdown and government support schemes mask a weakening labour market and when the furlough scheme ends in September, a spike in unemployment will follow.

There is a different way to deal with the situation. If the chancellor, Rishi Sunak, ditched his day-by-day approach to dealing with the pandemic and made a promise to maintain support for as long as it takes, employers could stop planning for cliff edges in subsidy schemes and plan for growth instead.

By Phillip Inman

Source: The Guardian

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Around 840,000 tenants face pandemic evictions: NLRA

Around 840,000 tenants who have fallen into arrears are in danger of losing their homes as a result of the pandemic, according to data from the National Residential Landlords Association.

The landlord’s body says that seven per cent of private renters have built up arrears since the UK’s series of national lockdowns began last March.

The average arrears were between £251 and £500, though 18 per cent, or approximately 150,000, of those with rental debts owed more than £1,000.

The NRLA says: “These debts are increasing to the point where there is no hope of many being able to afford to pay them back. The outcome will be that most will have to leave their homes as emergency measures taper down from June.”

The body claims that although most landlords have been working with struggling tenants to help keep them in their homes as far as possible, 60 per cent have lost rental income as a result of the pandemic. Of these, 39 per cent said their losses are mounting.

The intervention comes as courts begin to hear possession cases again following a six-month stay on proceedings imposed by the Financial Conduct Authority due to the pandemic.

Courts are hearing the most serious cases such as those related to anti-social behaviour, criminal activity such as fraud, and where arrears were amassed before lockdown measures began.

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However, the NRLA said the justice system is facing “strains” in this area, as they are “hearing the relatively few cases that are being allowed to go ahead”.

The body has called for video links to speed up cases.

It has also renewed its call for a package of hardship loans and grants for affected tenants to pay off arrears built since the beginning of the health crisis, so tenants can stay in their homes and are prevented from facing damaged credit scores.

NLRA chief executive Ben Beadle says: “While many landlords and tenants have worked well in responding to the challenges posed by the pandemic, we are now at a crunch point. As the country follows the roadmap out of lockdown, so too emergency measures in the rental market will need to be eased.

Beadle adds: “Ministers need to ensure the tenants have the financial means to pay off rent debts built as a result of the pandemic. Without this, they will have to accept the inevitable consequence of rising homelessness and damaged credit scores.”

Repossession claims by private landlords in the final three months of last year fell by 37 per cent compared to the same period in 2019, according to Ministry of Justice data released last month.

However, the Ministry of Justice statistician said these early figures, which cover England and Wales, should be treated with “caution”.

The statistician adds: “While these statistics are of interest to the public, it is worth noting that the small volumes of repossession actions mean that the data is unlikely to be representative of general trends in possessions. Caution should therefore be used when interpreting and applying these figures.”

By Roger Baird

Source: Mortgage Strategy

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Covid-19, a year on: the need for a more diverse UK economy

The UK economy was hit by a 10 per cent drop in GDP last year, the largest contraction of any G7 country. This is despite the fact that the health effects of Covid were broadly comparable across most other advanced economies, with the UK spending a similar amount of time in lockdown as Germany, France and Spain.

The damage has been disproportionately catastophic for London. Office for National Statistics figures show the capital’s unemployment stands at 6.9 per cent compared to the UK rate of 5.1 per cent.

The chancellor likes to point out that the UK measures GDP differently from other nations and so our headline figure for 2020 was lower than in reality. However, the UK’s economic contraction was still “significantly bigger than Germany’s” and among the lowest in the G7 even when taking these differences into account, according to Capital Economics.

One explanation for the poor performance is our economy’s over-reliance on services. Services – such as financial, legal, education, tourism, hospitality retail and real estate for example – make up 80 per cent of the UK’s GDP, while 14 per cent is construction and just 6 per cent is manufacturing. Shutting down the economy and locking people indoors for most of a year will naturally put a halt to much of the service industry, however there are still lessons to be learnt about the ability of the UK’s ability to handle future shocks. Covid-19 should be a serious wake up call to policymakers that they need to fundamentally alter the make-up of the economy.

As it stands, the UK is far too reliant on a model that sees its workforce act as service providers. Put simply – the UK needs to make things again. This doesn’t mean overturning the changes of the 1980s and trying to restart a swathe of industries that have long disappeared. Nor does it necessarily mean completely gutting or ignoring the financial services industry (this is City A.M. after all).

Instead, the UK needs to build up manufacturing and product development in sectors like green energy, tech, science and pharmaceuticals to ensure the economy can better weather future economic storms. Just as the sensible investor diversifies their portfolio to hedge for inherent market risk, so too should the UK diversify its economy for when the country is hit by future recessions or financial crises. This is particularly salient in the wake of Boris Johnson’s UK-EU trade deal, which included no provisions for services.

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Johnson’s levelling up agenda, and investment in skills training, shows he already understood the need for a larger manufacturing base, but this now needs to be turbocharged. The typical conservative levers to pull would be in the form of tax credits and deductions, much like Rishi Sunak’s recently announced super deduction that aims to stoke private sector investment. However, the government will need to go much further than this.

Theresa May earlier this month told the House of Commons that the only way to drive innovation and growth was through research and development funding.

“If we want an innovation economy what we need to do is to invest and support investment in areas which encourage growth and innovation – that means R and D,” she said.

What better time for a large increase in government R and D funding into green technologies as the UK gets ready to host the 2021 United Nations Climate Change Conference (Cop26)? There is a serious opportunity for this government to make the UK a global leader in renewable energy manufacturing and production, which would future-proof the economy for decades to come.

A readymade example for how increased R and D spending could benefit the UK and create new industries can be seen across the pond, according to Canadian policy wonk Marshall Auerback.

Auerback, a fellow at the Levy Institute think tank, told City A.M.: “The government should take an active role in terms of funding basic research and development…and the private sector can determine the most profitable venues for that R and D development.

“For instance, the foundation of Silicon Valley was largely built on the R and D provided through by US government through the Department of Defence and the National Institute for Health and Science.”

The dual disruptions of Covid-19 and Brexit provide the perfect opportunity for the UK to reset course and forge a dynamic economy for generations to come. Free of EU state aid rules and in a time of mass disruption to the way people work, the UK must embark on growing its economy by increasing its manufacturing base. Let’s hope Johnson takes the advice of former Barack Obama chief of staff Rahm Emanuel and does not let a serious crisis to go to waste.

By Stefan Boscia

Source: City AM

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Economy Surges Back And Employment Increases First Time In Months

The UK economy is springing back to life and creating more jobs for the first time since February, according to PMI data for March.

The Manufacturing PMI for March read at 57.9, which is above the 55.0 forecast and 55.1 reported in February. The Services PMI – which covers the largest component of the UK economy – read at 56.8, above the consensus expectation for 51.0 and February’s reading of 49.5.

Taking the two together and rebalancing the data to give a better snapshot of the broader economy gives us the Composite PMI which read at 56.6, which is well above 51.1 expected and the 49.6 reported in February.

The IHS/Markit PMI survey is a much-watched indicator of changes and trends in economic activity that offers the most comprehensive timely data to economists.

A reading below 50 represents contraction, a reading above represents expansion.

“The better-than-expected UK PMIs come as firms begin preparations for economic reopening in April and May. This bounceback in activity is likely to drive 4-5% growth in the second quarter,” says James Smith, Developed Markets Economist at ING Bank.

The inference is therefore that the economy is rebounding, and is doing so at a pace that is faster than economists and the market expected.

IHS Markit says the rebound in activity was the fastest recorded in seven months, fuelled by a rise in new orders for the first time since September 2020.

Survey respondents attributed to a rebound in sales ahead of easing lockdown measures, alongside stronger consumer confidence and a surge in demand for residential property services.

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For the first time since the start of the pandemic, service sector activity (index at 56.8) outpaced manufacturing production growth (55.6).

The survey reveals the government’s roadmap for fewer stringency measures in the coming months contributed to the strongest rise in total new work since August 2020.

Service providers noted forward bookings from domestic consumers, while some manufacturers cited advanced orders from hospitality businesses and high-street retailers.

However, exports remain a sore spot for the UK Economy as the survey reveals export sales remained relatively subdued with total new orders from abroad falling for the third month running.

Efforts to rebuild business capacity and respond to rising customer demand contributed to an increase in private sector employment during March.

This finding chimes with official ONS employment data out on Tuesday that showed the UK’s unemployment rate actually fell to 5.0% in January, leading some economists to suggest the peak in unemployment might already be in.

The PMI report shows the uptick in employment in March represented the first upturn in staffing numbers since February 2020 and the rate of job creation was the fastest for nearly two years.

“The encouraging readings on future expectations, job creation and new order inflows meanwhile all point to robust economic growth in the second quarter, especially if virus restrictions are lifted further,” says Chris Williamson, Chief Business Economist at IHS Markit.

The survey reveals that inflation could rise over coming weeks and months as positive trends for output, new work and staff hiring were accompanied by another round of steep input cost inflation during March.

The latest increase in average cost burdens was the sharpest since February 2017. Private sector companies continued to pass on greater operating expenses to clients, as signalled by an acceleration in the rate of output charge inflation to its highest for over three years in March.

The findings come on the same day the ONS reveals UK inflation was softer than economists were expecting in February, however economists are in agreement that all signs point to higher rates of price increases in the future.

Meanwhile, IHS Markit report expectations of rising sales after the national lockdown, and a boost to sentiment from the successful UK vaccine rollout, contributed to an increase in business optimism to its highest since January 2004.

“Dormant businesses were able to plan again with the imminent lifting of UK restrictions and consumers were securing their place in restaurants and holiday venues. Though international travel is still restricted, as long as the fastest rise in consumer costs for three years and the threat of new lockdowns doesn’t halt further progress, we can see more opportunities opening up in the coming months,” says Duncan Brock, Group Director at CIPS, who sponsor the PMI report.

ING’s Smith says these latest numbers probably don’t help us too much in pinning down GDP growth figures for the next couple of months as they tell us more firms are seeing improving conditions, but don’t necessarily indicate by ‘how much’.

“Nevertheless, it’s encouraging and is a reminder that sharply higher growth numbers are on their way,” says Smith.

Written by Gary Howes

Source: Pound Sterling Live

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UK economy bounces back from the pandemic with fastest growth since August

Business activity is growing at the fastest rate in seven months as UK economy bounces back from the pandemic.

Despite the continuing lockdown, firms recovered at the quickest pace since last August, according to a closely-watched survey from IHS Markit and CIPS.

But in a sign of the damage done to the economy, inflation slipped to 0.4 per cent in February from 0.7 per cent at the start of the year, figures from the Office for National Statistics showed.

Prices were driven down by clothing and footwear, and arts and recreation, as households remained locked indoors.

Experts were cheered by March’s pick-up in activity, and said it suggested the UK economy was finally on the path to recovery.

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Thomas Pugh, UK economist at Capital Economics, said: ‘Once the Covid-19 shackles start to be released next month, activity will probably rebound even more rapidly.’

The rise was driven by the services sector, where the purchasing managers’ index (PMI) reading rose to 56.8 from 49.6 in February.

Anything above 50 indicates expansion. The manufacturing PMI hit a 40-month high of 57.9, up from 55.1 in February.

Chris Williamson, of IHS Markit, said: ‘Companies reported an influx of new orders on a scale exceeded only once in almost four years, and business expectations for growth in the year ahead surged to the highest since comparable data were first available in 2012.’

By LUCY WHITE

Source: This is Money

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A year of Covid lockdowns cost the UK economy £251bn

A year of Covid-19 lockdowns has cost the UK economy £251bn – the equivalent of the entire annual output of the south-east of England or nearly twice that of Scotland, according to a report published on Monday.

Analysis by the Centre for Economics and Business Research found that while the whole of the country had suffered huge damage from restrictions on activity since the first national lockdown began, some poorer regions had suffered the most.

The consultancy said the north-south gap would widen unless the government took steps to ensure that the less well-off parts of the UK did not disproportionately bear the economic losses caused by the pandemic.

Sam Miley, a CEBR economist, said the report compared his organisation’s pre-Covid-19 forecasts for the UK with the level of output 12 months after Boris Johnson told Britons that they had to stay at home.

Gross value added (GVA) – which measures the value of the goods and services produced by the economy, minus the costs of inputs and raw materials needed to deliver them – was more than £250bn lower than it would otherwise have been, Miley said.

“Consumer footfall has plummeted, businesses are still shut, and many individuals have found themselves out of work. Further bouts of area-specific restrictions have added some regional variation to economic fortunes, a matter made all the more pertinent given the government’s promises to ‘level up’,” he said.

“These factors, amongst countless others, have entailed a huge cost to the UK economy, in addition to the devastating cost of thousands of lost lives.”

In absolute terms, the losses in London were the highest of any region, amounting to £51.4bn of lost activity. This was followed by the south-east and east of England, with losses of £34.7bn and £26.6bn respectively.

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But the CEBR said a different picture emerged when the size of each region’s contribution to the economy was factored in.

London accounted for just under a quarter of the UK’s GVA but had suffered just over a fifth (20.5%) of the losses since the start of the pandemic. This could be explained by London’s reliance on sectors such as finance and insurance, and information and communication, which had exhibited the smoothest transition to working from home.

By contrast, Scotland, Wales and regions such as the West Midlands, East Midlands, and the East of England, had suffered Covid-induced losses larger than their typical contributions to the economy.

Miley said that despite the anticipated recovery in the economy once lockdown restrictions were eased, some regions could be more subject to lingering effects from the pandemic, such as higher rates of joblessness and a greater degree of business closures.

“If the government is truly committed to addressing regional imbalance, it will not allow these areas to disproportionately bear the weight of the losses brought on by the pandemic. To do otherwise would risk further divergence in fortunes.”

This month, the Office for National Statistics said output as measured by gross domestic product (GDP) was 9% below where it was in February 2020, the last month before the first lockdown.

A separate report from the Learning and Work Institute has suggested that Britain’s economic recovery from the Covid crisis could be hampered by a looming digital skills crisis caused by a sharp fall in the number of young people taking IT courses.

The LWI – an independent policy, research and development organisation – said the number of young people taking IT subjects at GCSE had fallen by 40% since 2015, and the numbers taking A-levels, further education courses and apprenticeships were also declining.

It found less than half of UK employers believed new entrants to the workforce were arriving with the necessary advanced digital skillset.

The mismatch between the rising demand for digital skills and the supply of sufficiently trained recruits was already costing the economy billions of pounds and the potentially “catastrophic” gap would widen over time without urgent action, it said.

Source: Hellenic Shipping News

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UK unemployment falls for first time in Covid-19 pandemic

Unemployment in the UK has fallen for the first time since the coronavirus pandemic began despite the toughest lockdown measures since the first wave spread a year ago, according to official figures.

The Office for National Statistics said the unemployment rate fell back slightly to 5% in the three months to January, representing 1.7 million people – down from 5.1% in the three months to December. City economists had forecast a rise in the jobless rate to 5.2%. The government’s furlough scheme continues to support the jobs market, with millions of people still on the emergency wage scheme.

The latest snapshot showed a 68,000 increase in the number of workers on company payrolls in February, compared with January, as the roadmap out of lockdown restrictions boosted prospects. It was the third consecutive monthly increase.

However, the number of people on payroll has plunged by 693,000 since the start of the pandemic, with younger workers under the age of 25 accounting for 60% of the jobs lost since February 2020. More than half of the fall was in hospitality, while almost a third was in London.

The unemployment rate remains 1.1 percentage points higher than a year ago before the pandemic struck. Figures compiled by the ONS also showed the number of non-UK born workers in the final quarter of 2020 was half a million lower than a year ago.

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Suren Thiru, the head of economics at the British Chambers of Commerce, said furlough and greater clarity provided by the government’s unlocking roadmap, as well as firms adapting to lockdown restrictions, had helped the jobs market.

“Extending furlough will limit the peak in job losses. However, with many firms struggling with the damage done to their cashflow by a year of Covid restrictions, unemployment is likely to remain on an upward trajectory until well beyond a full reopening of the economy,” he said.

The number of workers on furlough has risen to almost 5 million as the toughest lockdown measures since the first wave of the pandemic weigh on the economy. After repeated attempts to close the scheme last autumn when redundancies were rising at the fastest rate on record, Rishi Sunak used this month’s budget to extend furlough until the end of September.

Unemployment is expected to peak at 6.5% at the end of this year after the scheme ends, according to forecasts from the Office for Budget Responsibility.

The chancellor said supporting and creating jobs had been his focus throughout the pandemic. “The continued success of the vaccine rollout provides us with hope for the future, and through our plan for jobs, we will continue to support people throughout the months to come,” he said.

Source: The Guardian

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