The UK has officially entered recession in August following two consecutive quarters of negative economic growth. Hopes for a sustained recovery following the easing of lockdown were dealt a blow as the impact of the downturn hit the average household.
Last month the GfK consumer confidence barometer indicated that households remained “highly pessimistic” about their financial wellbeing over the coming 12 months. Caution surrounding non-essential expenditure continued in August, with UK households recording a further reduction in their overall spending. The ongoing Covid-19 pandemic and reports of substantial redundancies across many industries from manufacturing to hospitality has led to a heightened sense of anxiety.
A separate report by the Chartered Institute of Personnel and Development (CIPD) and Adecco Group found that as many as a third of UK employers expect to cut jobs by October. This suggests that the economic impact of the coronavirus pandemic will accelerate in the coming weeks as the government furlough scheme ends.
The survey found some evidence of increased confidence in hiring workers, as the easing of the lockdown made recruitment less difficult. However, the CIPD said it was unlikely to make up for the wave of redundancies. Job losses have already hit hundreds of thousands of British workers across the economy, from factory workers to shop assistants and flight.
Figures from the latest IPSE confidence index show that the contracting sector has also succumbed to a significant slump. The latest report shows that the average contractor suffered a downtime of almost 50%, where they were benched for five-and-a-half weeks out of 13 without work. The great decline in utilisation, alongside a slight fall in day rates, led to an average 25% drop in quarterly earnings. This marks the lowest level of quarterly contractor earnings recorded since 2014 when the IPSE surveys began.
Restaurants and casual dining have been one of the sectors worst hit by the pandemic, with job losses of nearly double the amount during the whole of 2019. However this month the sector received a major boost from the Government “Eat Out to Help Out” initiative. More than 85,000 restaurants have now registered for the scheme. According to data from booking site Open Table, it has helped restaurants to be 27% fuller on average than they were during the Monday-to-Wednesday period in August 2019.
Meanwhile the results of the largest home antibody testing programme for COVID-19 were published by Imperial College London. The finding show that 6% of the population in England, around 3.4 million people, have been infected with COVID-19. People living in London were most likely to have been infected, as were those working in care homes and health care, and people from Black, Asian and other minority ethnic groups. Almost everyone with a confirmed case of COVID was found to have antibodies (96%).
The results come as a new 90-minute test that can detect coronavirus and flu has been rolled out in hospitals and care homes. The “on-the-spot” swab and DNA tests will help distinguish between Covid-19 and other seasonal illnesses. The health secretary said this would be “hugely beneficial” over the winter, with a third of tests currently taking longer than 24 hours to process.
There was more good news for the NHS this month as funding of up to £172m for thousands more apprentice nurses was unveiled by the Government. The funding comes as the number of people looking for information on nursing the NHS careers website rose by 138% between March and June. The Royal College of Nursing welcomed the move, but said the plans didn’t go far enough following the inadequate pay rise for public sector workers announced last month.
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