London briefing, July 6
-Unemployment could become new headache for UK
Under the government’s job furlough scheme, the government is paying 80% of the wages for 9.3 million jobs at a cost of £25.5 billion. However, according to research by the Institute for Social and Economic Research at the University of Essex, lockdowns could remove more than 6.5 million jobs out of the economy. Accommodation and food services are predicted to suffer the worst rate of cuts at 75.1% with a loss of around 1.3 million positions. Ranked second was 'other services' at 50.2%, ahead of 'wholesale, retail and repair of motor vehicles' at 47.6% - or roughly two million jobs.
Last week, the first signs of the bloodbath of job cuts were seen with more than 12 rounds of job cuts in the last 6 days; including up to 5,000 job cuts at Upper Crust owner SSP Group, up to 700 jobs at Harrods, about 600 workers at shirt maker TM Lewin, up to 900 cuts at management consulting firm Accenture, 300 staff cuts across Virgin Money, Clydesdale Bank and Yorkshire Bank, 1,700 UK jobs at plane-maker Airbus and 1,300 crew and 727 pilots at EasyJet and more.
While the economy is preparing to get out of lockdown and adapt to the new normal, it is clear that unemployment is likely to become a huge problem for the country.
The U.K. will plow £800 million ($1 billion) into job centers to cope with the surge in unemployment in the wake of the coronavirus pandemic. The government will double the number of work coaches to 27,000 to help benefit claimants back into work, with an initial 4,500 hires by October, the Treasury said late Saturday in an emailed statement, according to Bloomberg.
On Wednesday, Chancellor of the Exchequer Rishi Sunak will give a statement outlining measures to help stimulate the economy and protect jobs including additional funding for traineeships under a £111 million scheme.
The country is emerging from a national lockdown that began on March 23 with the opening of pubs and restaurants last Saturday. Most businesses are not yet able to make plans, as demand and consumer confidence will be decisive in adjusting to the new normal.
