Second wave could ‘ wipe out’ UK gains
Several leading economic think tanks have warned that British Chancellor of the Exchequer Rishi Sunak’s efforts to help revive the economy of the United Kingdom could be wiped out by a second wave of COVID- 19 infections, leading to a sharp rise in unemployment before Christmas.
The Centre for Economics and Business Research, also known as the CEBR, says at least 1.25 million more people could lose their jobs between now and the end of the year.
Previously, it had estimated the figure would be closer to 1.5 million, but it now says new measures announced by Sunak last week as a follow- up to the furlough scheme could reduce that number slightly.
The Institute of Public Policy Research, or IPPR, paints an even bleaker picture, saying as many as 3 million jobs could be lost, and this comes on the back of a survey by law company Fladgate warning that 35 percent of small and medium- sized businesses feared they would not be around this time next year.
Another think tank, the Resolution Foundation, which focuses on improving the living standards of those on low and middle incomes, has said the current climate risks producing a “COVID generation” of young people facing up to long- term unemployment in a way not seen since the 1980s.
Currently, youth unemployment stands at a record low of 5.5 percent, but the foundation says young people, along with pension- age workers, are most economically at risk from a second wave, with fears that youth unemployment among economically active 18- to 29- year- olds, meaning those in work or seeking it, could rise as high as 17 percent.
‘ Far from over’
“With infections rising again, the COVID crisis is sadly far from over,” said the foundation’s president and former government minister David Willetts. “That means the risk of losing a COVID generation to longterm youth unemployment is real.
“But there is plenty that policymakers can do to prevent it, from extra training provision to a greater focus on creating new jobs to support people out of this crisis.”
Ed Miliband, the Labour Party’s shadow business secretary, has warned that fewer than one in 15 jobs in shutdown businesses will benefit from the latest expansion of the government’s job support scheme announced by Sunak last week.
Some sectors, such as events and conferences, and those to do with the wedding business, have all but shut down, but not technically closed. Miliband warned that huge numbers of people involved in these jobs would be afforded no protection.
He accused the government of putting large sectors of the economy, close to 1 million jobs, on the “scrapheap” and urged the minister to “urgently rethink their damaging sink- or- swim approach”.
Economic forecasting group the EY ITEM Club says it expects economic growth of no more than 1 percent in the final quarter of 2020.
The country has experienced Europe’s deadliest outbreak, with an official death toll of 42,875 as of Tuesday. Health officials say Britain is at a tipping point in the outbreak. Prime Minister Boris Johnson on Monday set out details of a new three- level COVID- 19 alert system putting the northern city of Liverpool into the highest risk category and shutting its pubs, gyms and betting shops.