Easing of lockdown the golden egg of recovery?
As Easter passes, there are hopes the easing of lockdown will be the golden egg of economic recovery. Companies around the UK are feeling positive. They are starting to bring back workers from furlough, even hiring new staff in the run-up to 12 April. But there are also fears the plans are fragile. Will a strong recovery be possible after the initial post-lockdown rush fizzles out?
Spring shoots of recovery
Recent figures from the Office for National Statistics show UK online job advert totals hit 96% of the pre-pandemic average in March. And with unemployment figures falling to 5%, Britain may defy the gloomiest economic forecasts if it stays on the current track.
But cracks are already showing
While there’s a lot to be cheering for, 5 million workers remain on furlough. With the scheme closing in September, an estimated 850,000 jobs will be at risk of redundancy, reduced hours or lower pay. The OBR expects that about 2.2. million people will be unemployed by autumn.
According to the latest Business Impact of COVID-19 Survey (BICS), 32% of businesses have less than three months of cash reserves, and 8% have less than one month. It means that some companies will have very little capacity to keep workers employed until business activity fully returns.
If hopes of economic recovery do turn out to be hollow, preparations need to be made. A national skills program will be needed to support people back into employment. Otherwise, the potential of a two-tier economy threat with affluent home workers and those in lower-paying roles and unemployed may become a reality.
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