Furlough extension: "we are not out of the woods yet" says Prof Hogarth
It is announced today in the Budget that the furlough scheme in the UK will be extended to September. Read more on BBC News.
Professor Terence Hogarth, from the Warwick Institute for Employment Research, comments:
"The Office for National Statistics estimates that GDP over 2020 will have contracted by 9.9% - the largest annual fall in UK GDP on record. One might have expected, given the magnitude of the economic downturn, that unemployment would have risen sharply, much as it did after the severe recessions in the early 1980s and 1990s.
"For the period October to December 2020, the unemployment rate stood at 5.1%, up 1.3 percentage points from a year earlier. An increase, but perhaps not on the scale one might have imagined. Policies such as the furlough scheme have clearly dampened the increase in job loss. With the economy forecast to grow strongly during 2021 it is likely that many viable jobs, which just needed support over the lockdown period, will have been saved.
"But we are not out of the woods yet. It is inevitable that not all jobs can be saved so unemployment may well continue to increase for a while yet, and the situation for young people entering the labour market remains challenging."
3 March 2021
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