As coronavirus uncertainty continues to roil the economy, news of turmoil in the jobs market shows that employment is following suit.
New data from the Office for National Statistics (ONS) published on Tuesday showed that UK employers have slashed 695,000 jobs since March when COVID-19 first sent Britain into national lockdown.
Britain’s official unemployment rate also increased as expected by analysts to 4.1% between May and July, from 3.9% a month earlier.
The claimant count, which includes unemployed and low-paid workers receiving work-related benefits, stood at 2.7 million last month, up 120.8% since March.
New estimates also show the total number of jobs in Britain has fallen by 354,000 to 35.4 million between March and June, the steepest fall in almost three decades.
Further worrying data were released later in the week as the Confederation of British Industry and recruiter Pertemps found 46% of businesses plan to either reduce or halt recruitment over the next year.
Britain’s COVID-19 jobs slowdown looks set to continue for at least another year, with almost half of all businesses planning to either reduce hiring or stop recruitment altogether over the next 12 months.
51% of companies said they planned to continue or increase hiring activity, according to the 23rd annual Employment Trends Survey.
On balance, hiring activity across the economy was +5%. However, that marked a sharp slowdown compared with last year when the same survey returned a balance of +56%.
The findings suggest Britain’s jobs drought is unlikely to improve much in the next 12 months. Job vacancies have collapsed since the COVID-19 pandemic struck and remain around 50% below where they were a year ago, according to the Office for National Statistics.
Two studies released on Monday also laid bare how the coronavirus is likely to continue to wreak further economic havoc in the short-term.
Around 450,000 redundancies are predicted in the autumn alone by the Institute of Employment Studies (IES).
Employers are required to notify government of large-scale redundancies, and analysis of official figures shows almost 380,000 were formally put at risk of redundancy between May and July.
The IES says the numbers are more than twice as high as at the peak of the global financial crisis in 2009, and would be the highest since records began in 1995.
It expects actual redundancies in the autumn to be even higher, as employers only have to notify of job cuts affecting 20 or more staff.
Amid gloomy jobs data and warnings of a prolonged jobs lockdown, on Tuesday, Britain’s chancellor declared the furlough scheme, which is due to end on 31 October, has “done what it was designed to.”
Rishi Sunak resisted mounting pressure to extend support for hard-hit sectors, pointing to recent official figures showing more than half of furloughed workers had returned to their jobs by mid-August.
Sunak also highlighted the government’s plans to hand employers bonuses for keeping staff and fund youth work placements as the furlough scheme winds down.
But the chancellor faced a flurry of warnings from economists, business chiefs and Labour on Tuesday that a wave of job losses will only continue this autumn without more support for employers.
MPs have also called for targeted extensions to the scheme, warning that viable businesses could go under if they go without further support.
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