The Prime Minister recently announced the next phase of easing lockdown measures, which saw the UK’s alert level downgraded from four to three. Although figures for daily cases are still in the thousands, the virus is no longer spreading exponentially and the country continues to meet the five tests used to confirm the virus is under control. While the need to remain vigilant will keep many social distancing measures in place with some easing of the 2m rule, the PM stated that a second peak of infections would be unlikely to overwhelm the NHS.
Many workers returned to the workplace this month as the first stage of furloughing was completed. Although the scheme will extend until the end of October, the next phase will see businesses topping up the wages of staff on top of the CJRS. Statists from the ONS show that 81% of all businesses applied for the scheme, which will ultimately lead to an estimated £58bn of government borrowing.
Across all industries, 30% of the workforce was furloughed under the terms of the CJRS, with 42% of businesses now providing top-ups to furloughed workers’ pay. However, many businesses have already chosen to cut jobs without extending furlough. Economists are predicting unemployment will rise as more companies cut costs to survive the inevitable recession ahead.
Between March and May, the number of people claiming work-related benefits rose 126% to 2.8 million. Last week, official jobs data showed the number of workers on UK payrolls fell by more than 600,000 in this period. The share of employees and self-employed actively working remains comparable at 67.0% and 79.9% respectively. Of the number of UK businesses continuing to trade, 65% reported their turnover has been lower in June than usual.
Job vacancies are now over 40% lower than before the start of the crisis. Hospitality/catering, administration, consultancy, and HR/recruitment have recorded the largest percentage drop, while the categories with the highest percentage of vacancies are in healthcare, nursing, teaching, IT and social work. Social work is only category where vacancies have continued at similar levels to before the crisis began, while health and nursing vacancies continue to make up 1 in 5 available vacancies.
The social impact of the virus continues to be felt, with an estimated 12.5 households financially impacted. There are also some signs of increasing economic inequality, with lower income households turning to high interest borrowing during the covid-19 crisis. Many higher income households, by contrast, have boosted their savings - adding to existing inequalities.
Around 20 unemployed workers are applying for every job vacancy in poorer parts of the UK, with that number rising to 50 in the areas worst affected such as manufacturing hubs like the Midlands. Parents were also more than twice as likely to report reduced income and were more likely to have been furloughed than adults without children in the house, with over 20% finding childcare impacting their work.
Anxiety levels flattened out to 75% of those seen in the first week of lockdown as nearly half of all working adults adjusted to homeworking. However, recent survey evidence suggests people have become more pessimistic about the country’s economic situation and about the future. The outbreak of a second wave of the virus in several countries, and the heavy UK death toll maybe be contributing factors.
There’s been recent talk of a “V” shaped recovery out of recession, however, a realistic recovery time is likely to be 3-4 years. The stock market crash on the 12th March marked the collapse of sectors such as hospitality, oil and manufacturing on a global scale, as many countries went into lockdown. In Europe and the UK, weak economic growth in 2019/20 reflected existing concerns about Brexit. Economists are now warning that a no-deal Brexit would significantly damage the UK’s recovery from its deepest recession in almost a century.
Contractors can benefit from an uncertain market by transferring their skills to where they’re most needed. If you’re looking for a new contracting role, our article on bagging the best contracts post-Covid is a good place to start, followed by our analysis of the current hot markets for contractors. Umbrella Exchange has a range of options to help you keep your contracting career on track. To talk to a member of our team, call: 0203 393 3881
