The jobs thunderstorm storm is breaking

Linda J. Dodson

Josie Dent, senior economist at the Centre for Economics and Business Research, warns: “It is clear that the negative labour market impacts of the coronavirus crisis are far from over. Indeed, with the end of the furlough scheme looming in October, Cebr is forecasting a sharp rise in the unemployment rate. We expect it to peak at 8.9pc in the fourth quarter, before dropping back again in 2021 as the UK economy recovers from the crisis.”

With sad predictability, the pain isn’t being shared equally either. By region the North-East – already a UK laggard in economic terms – has seen the highest unemployment rate, at 5.2pc. It is closely followed by the capital at 5pc, thanks to its hefty share of customer-facing service industries, bars and restaurants. 

For the same reason, younger workers are also bearing more of the early scars of the jobs burden, as the retail and hospitality sectors typically offering them their first jobs struggle. The figures show a 156,000 slump in employment among 16 to 24-year-olds in the quarter to July, with a record 146,000 drop for those between 18 and 24.

The economic literature – from the likes of former MPC rate-setter David Blanchflower – suggests this unemployment will be living with them decades into the future in the form of lower earnings, unless the Government’s new Kickstart scheme can mitigate the effect.

Source Article

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