With the official announcement that the UK has entered a recession, the Chancellor has said the economic slump will lead to more job losses in the coming months. Official jobs figures released on Tuesday showed the number of people in work fell by 220,000 between April and June, with one in three companies expecting to announce more redundancies by autumn. As the lifting of lockdown continues through August, we take an overview of the shape of things to come.
Concerns about unemployment have caused trade unions to urge Chancellor Rishi Sunak to extend the government furlough scheme. More than nine million jobs have been furloughed under the government’s job retention scheme, with two-fifths of businesses who had furloughed staff now providing pay top-ups. However, in a BBC interview on Wednesday, Mr Sunak did not waver on ending the government’s furlough scheme of job subsidies
Unemployment is expected to almost double from the current rate of 3.9% to 7.5% by the end of the year as government-funded support schemes come to an end. Average earnings are also expected to shrink for the first time since the financial crisis. The Bank of England said more workers faced a pay cut or freeze in 2020. Online job adverts have been slow to recover from their low point on 1 May 2020 and remain at around 50% of the 2019 average. Higher figures were seen in transport, logistics, and warehousing which increased five percentage points to 71% of the 2019 average – for more on the latest hiring news see here.
The Bank expects the UK economy to shrink by 9.5% this year – the biggest annual decline in 100 years. The UK now faces its sharpest recession on record. Inflation is expected to fall close to zero by the end of 2020, before gradually rising back to its target of 2%. Growth of 9% in 2021, and 3.5% in 2022 is forecast, with the economy regaining pre-Covid strength at the end of 2021. However, the latest forecasts are based on the assumption that there is a smooth transition to a new EU free trade agreement at the start of 2021 and that there is no second wave of the virus.
Meanwhile, a new 90-minute test that can detect coronavirus and flu has been rolled out in hospitals and care homes. The “on-the-spot” swab and DNA tests will help distinguish between Covid-19 and other seasonal illnesses. The health secretary said this would be “hugely beneficial” over the winter, with a third of tests currently taking longer than 24 hours to process. Sir John Bell, Professor of Medicine at Oxford University, who has been advising the government on tests, said they produced the same “sensitivity” as the current lab-based tests.
There was good news for the NHS this month as funding of up to £172m for thousands more apprentice nurses was unveiled by the Government. The funding comes as the number of people looking for information on nursing the NHS careers website rose by 138% between March and June. The Royal College of Nursing welcomed the move but said the plans didn’t go far enough. There are calls for the government to scrap tuition fees for nurses, who were among the NHS workers who took to the streets to demand better pay following the inadequate pay rise for public sector workers announced last month.
Lastly, August saw the Government launch their “Eat out to help out” initiative at more than 72,000 venues across the UK. No vouchers are required, with the participating establishment deducting 50% from the bill and charging the discount to the Treasury. Officials said there had been more than 3.3 million hits on the “eat out to help out” restaurant finder website since it started up last week. However, there’s still concern among the public about eating out, with ONS figures reporting a significant increase of adults wearing a face-covering in public.
With this in mind, offices, factories and shops could soon be given a “Covid security” rating measuring how well protected against the spread of coronavirus they are. Government scientific experts recommend using information from health and safety spot checks combined with data gathered by NHS Test and Trace to determine the settings where Covid-19 infections are most likely to take place. The ratings could then be used to help the public decide what level of risk they are comfortable with based on their own susceptibility to the disease.
For a more international outlook read our article here. If you’re starting a new contracting role then ContractingWISE have access to a wide range of hassle-free services that can help you with setting up a limited company or finding the right umbrella company for you. To talk to a member of our team, call: 0203 642 8679