With the coronavirus pandemic still taking hold of our community, employers across the country are cutting thousands of jobs as the economy continues to suffer.
The worst hit industries in the UK are the retail and hospitality sectors where at least 157,813 jobs have been lost. According to Sky News, the top five industries that experienced large job losses are:
1. Retail – 39,207
2. Hospitality – 38,653
3. Aviation – 34,304
4. Wider economy – 27,081
5. Energy – 9,600
The biggest hit companies are British Airways who cut 12,00 jobs, and M&S who cut a respective 7,950 jobs. Other known retailers who have gone into administration are the Arcadia Group, Bonmarche, Debenhams, Peacocks and Jaeger, DW Sports, Oasis and Warehouse Group.
UK Unemployment Rate
According to the Office for National Statistics (ONS), the UK unemployment rate from July to September 2020 lowered to an estimated 4.8% which is 0.9 percentage points higher than the previous year. This meant that 1.62 million people were unemployed.
Chancellor Rishi Sunak warns that this rate is expected to surge to 2.6 million by the middle of 2021, which is 7.5% of the working age population. In his Spending Review, the Chancellor called the effect of Covid-19 on employment an “economic emergency” which has only just begun.
This sentiment has been reinforced by the Bank of England which predicts that unemployment will likely peak at 7.7% in April to June next year. A report produced by the Bank of England revealed that Covid-19 has put a large strain of UK businesses’ cash flow.
"Spending in the economy remains well below normal levels. The rapid rise in cases of Covid and the recent measure taken to contain the virus will reduce spending further. Inflation is well below our target."
It was revealed on 25 November from the Office for Budget Responsibility (OBR), the public body which analyses and forecasts government spending, the UK’s borrowing is estimated to be £394 billion for the current financial year (April 2020 to April 2021). The total is the highest figure ever seen outside wartime.
Data from the ONS survey, which looks at people aged 16 and over, shows that the employment rate has been decreasing since the beginning of the pandemic, while the unemployment rate is rising sharply.
The estimated total of job vacancies available in the UK from August to October 2020 is an estimated at 525,000 – this is 278,000 fewer than what was available a year ago. Since March 2020, the number of payroll employees has fallen by 782,000; the larger falls in this number were seen at the start of the coronavirus pandemic.
While vacancies have started to recover in the latest period analysed by the ONS, the country is still largely below the levels that were seen before the start of the Covid-19 pandemic.
Redundancies
Redundancies in the nation have also reached a record high. Between July to September 2020, redundancies increased to a record high of 314,000 – this number shows an increase of 195,000 which is largest increase in redundancies seen by the ONS.
Redundancies have been increasing since June of this year, with an increase in this growth in the first two weeks of September.
Job Entry Targeted Support Scheme
In a bid to support those who have lost their jobs due to Covid-19, the Department for Work and Pensions (DWP) revealed plans for a Job Entry Targeted Support Scheme, otherwise known as the JETS scheme. This new programme is targeted towards those who have been out of work for at least three months; job hunters are provided with an action plan to follow with opportunities to build their skills.
People who have been claiming Universal Credit or Job Seekers Allowance are given advice on how to move into growing sections, as well as support with CV-writing and interview techniques. 13,500 work coaches will provide these CV writing tips and interview coaching to improve job seekers’ chances of securing employment.
The JETS scheme is funded by a £238 million investment and it was created with the intention of protecting the livelihood of employees across the nation, and to protect UK businesses.
“I’ve spoken about the damaging effects of being out of work, but through Jets we will provide fresh opportunities to those that have sadly lost their jobs, to ensure that nobody is left without hope.”
“JETS will give recently unemployed people the helping hand they need to get back into work, boosting the prospects of more than a quarter of a million people across Britain.”
The DWP announced that they have referred more than 40,000 people (800 per day) to its new Job Entry Targeted Support Scheme in the first two months of its launch. The scheme was announced at the beginning of October by Chancellor Rishi Sunak.
The Job Support Scheme replaced the furlough scheme in November, hoping to curb job losses over the coming months. For information visit www.gov.uk/government/news/nation-s-job-hunt-jets-off.
If you are struggling during these unprecedented times and would like help with managing your finances, please get in touch as we are more than happy to help.