About 2.6 Million U.K. Workers Expect to Be Fired Soon
(Bloomberg) -- About 2.6 million people in the U.K., or 8% of workers, expect to lose their jobs in the next three months, according to a survey that suggests long-lasting damage to the economy from the coronavirus.
The figures include people who have already been told that they will be made redundant, with young people and the lowest earners at greatest risk, the Resolution Foundation said Wednesday.
The analysis found about 2 million people had been unemployed or on furlough for the past six months, a length of time that leaves them at higher risk. A separate British Chambers of Commerce survey found a quarter of the 1,100 businesses polled planning job cuts if government support programs end as planned.
The findings puncture forecasts that the economy and most jobs will quickly recover once lockdown restrictions are lifted. Prime Minister Boris Johnson hopes a rapid vaccination program will allow shops, restaurants and bars to reopen by the summer, returning most of those unemployed to work.
“While the U.K.’s economic prospects are finally looking up, job insecurity remains high, particularly among those who have spent long periods not working, or who are currently furloughed,” said Nye Committing, senior economist at the Resolution Foundation.
Bank of England policy maker Michael Saunders is set to speak on unemployment at an event hosted by the think tank on Thursday. His comments and the foundation’s report will help feed a debate about how aggressively Chancellor of Exchequer Rishi Sunak should support workers through the pandemic in his budget statement on March 3. The central bank is forecasting unemployment will rise from 5% currently to 7.8% by the third quarter, leaving the total number of jobless at 2.7 million.
Resolution called on the Treasury to extend furlouging beyond the end of Covid restrictions. Earlier this week, the Institute for Fiscal Studies also recommended Sunak taper back the furlough program, which is current due to expire in April, giving companies an incentive to adjust to the new economic reality.
The Resolution analysis counts almost 2 million workers as either unemployed or fully furloughed for the six months through January. Those would have remained out of work in September, October and parts of December when restrictions were loosen in much of the country. The foundation surveyed almost 6,000 people age 18 to 65.
A full national lockdown came into force in January, forcing all restaurants, bars and non-essential shops to shut. About 4.5 million people were on furlough last month, half the level prevailing when restrictions were first imposed in March 2020, the report said.
Those people who haven’t worked for longer risk losing skills and missing out on earnings growth, Resolution warned. For those on furlough for the past six months, 21% are bracing for a redundancy notice.
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