Jobless total will soar to almost THREE MILLION by Christmas: Dire outlook as experts predict 1.5million people are set to lose their jobs before the end of the year
- The CEBR says new furlough scheme is ‘unlikely to prevent a major loss of jobs’
- The new scheme will now pay two-thirds of wages for staff in local lockdowns
- Around 3.6million people were still on furlough by the end of September
Almost three million people will be unemployed by Christmas, according to a shocking prediction, with about 1.5million set to lose their jobs before the end of the year.
The dire warning from think-tank the Centre for Economics and Business Research (CEBR) comes as its economists said data from its Business Distress Tracker and the Office for National Statistics indicated that Rishi Sunak’s new furlough scheme was ‘unlikely to prevent a major loss of jobs’.
Last week the Chancellor pledged to expand the scheme, which will now pay two-thirds of the wages of staff who have been forced to stop working by local lockdowns.
This came ahead of an announcement expected today that restrictions will require some firms to close in outbreak areas.
Almost three million people will be unemployed by Christmas, according to a shocking prediction
The CEBR said: ‘The low-skills, low-pay sectors which are particularly affected by this crisis (eg hospitality) will not make extensive use of this.
‘The scheme is, therefore, unlikely to prevent a major loss of jobs.’
The new scheme pays two-thirds of the wages of staff who have been forced to stop working by law in local lockdowns.
It is less extensive than the one it replaced, which paid 80 percent of workers’ salaries and was hurried in to avoid a ‘cliff-edge’ explosion in unemployment.
The Government announced the first furlough scheme in March after the country went into a nationwide lockdown and many companies were forced to essentially go into hibernation – particularly if their employees could not work from home.
Centre for Economics and Business Research (CEBR) economists said data from its Business Distress Tracker and the Office for National Statistics indicated that Rishi Sunak’s (pictured) new furlough scheme was ‘unlikely to prevent a major loss of jobs’
Furlough was originally supposed to finish in August.
Around 3.6million people were still on furlough by the end of September.
According to CEBR, businesses are planning to lay off more than a third – 35 percent – of furloughed staff after the scheme runs out in less than three weeks’ time.
And there are lots of industries that will not benefit from the new state assistance.
Many will be ‘shut in all but name’, according to a Labour analysis, but will not actually legally be forced to close, meaning they will not be eligible.
This includes conference and exhibition organisers, event caterers and actors, musicians and other creative artists.
The think tank said: ‘The low skills, low pay sectors which are particularly affected by this crisis (e.g. hospitality) will not make extensive use of this. The scheme is, therefore, unlikely to prevent a major loss of jobs.’
Redundancies have already risen at their fastest pace for more than a decade.
According to the Office for National Statistics, the total number of workers on company payrolls dropped by almost 700,000 between March and August.
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Redundancies in the three months to July rose at the fastest pace since 2009, up 48,000 from the previous quarter.
The official unemployment rate has now risen for the first time following the start of the pandemic, edging up from 3.9 to 4.1 per cent – a two-year high.
The bleak outlook for jobs follows previous CEBR research that found a third of all businesses trading at the start of 2020 are expected to go bust by next summer.
During a normal 18-month period around 15 percent of companies typically shut down – but the coronavirus pandemic has battered trading in virtually all industries and pushed many firms to the brink.