Furlough

As government considers whether to lock us down once again, should it put economic support for businesses affected back on the table? The combination of Plan B and Boris Johnson’s insistence that we modify our social behaviour has led to empty cinemas, ghost trains, cancelled gigs and ‘postponed’ Christmas parties. Just as the economy was getting back on its feet, the unofficial guidance to avoid social events is knee-capping it once again, forcing the Chancellor to not only drop his December plans but to announce yet more taxpayer-funded business compensation. So far he’s fallen down on the side of more support, though nothing (yet) like last time. Businesses in England that

October’s employment figures, according to the Chancellor Rishi Sunak are ‘testament to the success of the furlough scheme’. The other way of looking at the figures, released this morning, is that they show why the furlough scheme should have been wound up months ago, rather than at the end of September. The number of people on payroll in October rose by 160,000 to 29.3 million in spite of furlough ending. The unemployment rate fell by 0.5 per cent. The employment rate, at 75.4 per cent, is now just 1.1 percentage points lower than it was in the three months leading up to the pandemic. It is astonishing because at the

At some point, Rishi Sunak is going to need to pick a lane. There is only so long that the Chancellor can claim to believe that excessive borrowing is immoral while borrowing to such excess. His trick yesterday was to make all the right noises about restraint while unrolling a £500 million ‘plan for jobs’. Take away his earnest delivery and it’s still not clear whether he’s the boozer at the bar telling the world about the dangers of alcoholism, or the sensible friend ordering the taxi home. Let’s be fair. Sunak has had to deal with exceptional circumstances in the last 18 months, and is taking steps to cease

Concorde obviously. The Iraq War perhaps? Or Scottish devolution? It is not hard to come up with a list of really terrible ideas that the British government has wasted money on over the last 50 years. Even so, and despite some tough competition, we now have a fresh contender. It looks as if the furlough scheme will top them all. The scheme ends today, with roughly a million people still collecting a slice of their wages from the Treasury. The total bill is set to come in at around £70 billion. To put that in context, for the same money we could have tripled spending on policing and just about

The pandemic continues to cause surprising events in the labour market — and challenges too, many of which were wholly unanticipated when the Covid crisis began. Today’s update from the Office for National Statistics on labour market numbers is case-in-point: the unemployment rate again, down to 4.6 per cent from May to July. Forecasts of nearly 12 per cent unemployment, once predicted by the Office for Budget Responsibility, are long in the past. The furlough scheme has starved off an unemployment surge and there’s good reason to think it’s been avoided altogether. Over one and a half million people were still on furlough at the end of July. But even

Job vacancies at a record high, a shortage of 90,000 lorry drivers, farmers complaining about a lack of seasonal workers, care homes complaining about difficulties in recruiting staff — and 1.9 million people still on furlough at the end of June. It shouldn’t be difficult to put these figures together and work out what is going on — even if Lord Adonis, with his usual tunnel vision, has been busily tweeting blaming everything on Brexit. When the furlough scheme was introduced it was intended as a short-term measure to tide over businesses that had been forced to close as a result of Covid restrictions. So why is it still in place when

Alongside the UK’s latest step in reopening, optimistic forecasts have been rolling in concerning the economy’s timeline for returning to pre-pandemic levels. This morning, we got another positive indication that businesses are resuming normal operations. The latest update on furlough figures shows 1.9 million workers are still on the scheme as of the end of June — the lowest level of people having their wages paid by the state since furlough was first introduced during last year’s spring lockdown. The number of people on the scheme fell by half a million last month, and by roughly three million since March. The continued fall is hardly surprising, as each month since

The horror! Yesterday we discovered that UK economic output — as measured by GDP — fell by 1.6 per cent in the first quarter of the year, 0.1 per cent worse than the 1.5 per cent originally reported. This is practically a rounding error. To put it in context, as recently as March the Office for Budget Responsibility, which crunches the numbers for the Chancellor, was forecasting that GDP would fall by 3.8 per cent in Q1. As well as still beating these gloomy expectations, the latest figures are also old news. But if anything, the detail is encouraging. The downward revision to headline GDP was largely due to a bigger decline

The latest employment figures, published this morning, confirm a remarkable aspect of the Covid pandemic: that it appears to have caused no more than a little bump in the jobs miracle of the past decade. That is in spite of the economy shrinking by nearly 10 per cent in 2020 — a performance that in the past would have led to millions out of work. In May the unemployment rate fell by 0.3 per cent to 4.7 per cent. By contrast, it reached over 8 per cent during and after the 2008 financial crash. But of course, the unemployment figures don’t tell the whole story — not when we have a

The ONS recorded a sharp recovery in economic growth in March. The Bank of England has already increased its forecast for the growth of the UK economy in 2021. Now comes more evidence of rapid growth. The quarterly CIPD/Adecco Labour Market Outlook, published today, shows a sharp rise in the number of organisations that are hiring extra staff or are expecting to do so over the next few months. The survey, which goes out to 1,000 employers in the private, public, and voluntary sectors, found that 36 per cent of employers are planning to increase staff levels over the next three months. Nine per cent said they are expecting to

Last week the Bank of England increased its forecast for economic growth in 2021 from 5 to 7.25 per cent. Now comes more evidence of an economic recovery that is gathering pace, in spite of many lockdown measures still being in place. A UK report on jobs compiled by KPMG and REC, which uses data from 400 recruitment firms, measured in April the sharpest new increase in vacancies since it began in 1997. Contrary to the claims by the Labour party and others that British workers are facing a future of increasingly short-term contracts, the rise was principally down to a rise in vacancies for permanent roles which were at

Over the past few months, each labour market update from the Office for National Statistics has suggested forecasts predicting mass unemployment were wide of the mark. In the three months leading up to February, unemployment was estimated to hover at 4.9 per cent, 0.9 per cent higher than the previous year but down 0.1 per cent from the previous month. Where credit is due is debated – and likely shared. The jobs retention scheme continues to shield five million workers, who cannot yet return to their jobs, from unemployed status. That GDP has not taken anywhere near the same tumble this winter as it did last spring speaks to innovative