Unemployment nightmare to worsen after 12,000 jobs lost in a week
Britain could face an even bigger unemployment crisis than first feared when the taxpayer-funded furlough scheme ends in October following a raft of job losses this week, experts have warned.
Unemployment is expected to peak at a record 3.3 million this year, according to The Centre for Economics and Business Research (CEBR) - but chief executive Doug McWilliams warned this could get far higher still amid a growing litany of lay-offs.
More than 12,000 job losses have been announced this week alone by a host of major employers, including aerospace titan Airbus and Upper Crust sandwich chain owner SSP.
Chancellor Rishi Sunak is due to set out plans on securing the recovery next week, but Boris Johnson has played down the chances of the furlough scheme that has protected 9.3 million jobs being extended beyond October.
Mr McWilliams said the jobs carnage - yet to be reflected in official figures - was “like a fire in the wind” despite the temporary respite offered by state support.
He said: “What we don’t know is what happens after [furlough ends]. If there are job losses and companies fail, and there is quite a long period of nothing happening, it will all unwind pretty damn quickly."
The British Chambers of Commerce has called for a wage subsidy for employers to take on apprentices as well as measures such as national insurance holidays for firms taking on new staff.
Adam Marshall, its director-general, said employers would not take apprentices on without support. On tax breaks for employers, he added: “Waiting until an October Budget could be too late.”
Capital Economics said a labour market meltdown could pose a dire threat the country's recovery.
Thomas Pugh, one of its economists, said: “While there are signs that the economy is recovering more quickly than expected, a large rise in unemployment is on the horizon. This, combined with Brexit uncertainty and the possibility of further local lockdowns, is why we expect the nascent economic recovery to peter out in the second half of this year.”
