UK jobless figures climbing but most dangerous moment may have passed

Unemployment in Britain is beginning to climb despite a modest rebound in economic activity in the past month as coronavirus lockdown restrictions are lifted, Guardian analysis shows.

As the government eases restrictions on business and social life after three months of lockdown, the Guardian’s monthly tracker of economic news paints a mixed picture of an economy slowly recovering from the deepest recession in living memory.

Britain’s economy shrank by a record 20.4%, according to the latest figures for April, and job losses appeared to be mounting, with thousands of businesses forced to close.

However, closely watched surveys of business activity suggest the moment of maximum damage for the economy may have passed, while consumer spending and road trips are starting to rise as lockdown is eased.

As Britain exits the initial phase of the Covid-19 crisis, Rishi Sunak, the chancellor, is expected to announce a package of measures to stimulate the economy in a major speech next month.

But with signs of a slower recovery than first anticipated, the shadow chancellor, Anneliese Dodds, is warning in an article in the Guardian against cutting back support too quickly.

The Guardian has chosen eight economic indicators, as well as the FTSE 100 level, to track the impact of Covid-19 on jobs and growth and the measures used to contain it. Faced with a synchronised global recession of the kind unseen since the Great Depression, the coronavirus crisis watch will also weigh how the UK is faring compared with other countries.

Three months into the health emergency, the latest snapshot shows several warning lights flashing on the dashboard. In a sign of the mounting jobs crisis, the number of people out of work and claiming work-related benefits has jumped by 126% since the beginning of tlockdown to reach 2.8 million.

HMRC figures show the number of people on company payrolls plunged by 612,000 last month compared with March, while new job vacancies collapsed by the most on record. Unemployment is expected to more than double from the current rate of about 4% to levels last seen in the 1980s.

Major job cuts announced so far

The coronavirus lockdown has prompted some of the UK’s most prominent companies to announce large-scale job losses. The aviation, automotive and retail sectors have been among the worst hit, as businesses adjust to dramatically reduced revenue projections.

While the government’s job retention scheme has so far protected millions of jobs, fears are mounting that unemployment will rise as the scheme begins to be phased out from August.

Since lockdown began on 23 March, some of the UK’s largest companies have announced plans to cut a total of 60,000 jobs globally, many of which will fall in the UK.

Rolls-Royce – 9,000 jobs
The jet-engine manufacturer has confirmed that 3,000 job cuts, of a planned 9,000 worldwide, will be made in the UK. In May Rolls-Royce said it would make the first round of redundancies through a voluntary programme, with about 1,500 posts being lost at its headquarters in Derby, as well as 700 redundancies in Inchinnan, near Glasgow, another 200 at its Barnoldswick site in Lancashire, and 175 in Solihull, Warwickshire.

BP- 10,000 jobs
The oil company said in June it plans to make 10,000 people redundant worldwide, including an estimated 2,000 in the UK, by the end of the year. The BP chief executive, Bernard Looney, said that the majority of people affected would be those in office-based jobs, including at the most senior levels. BP said it would reduce the number of group leaders by a third, and protect the “frontline” of the company, in its operations.

Centrica- 5,000 jobs
The owner of British Gas announced in June that it intends to cut 5,000 jobs, mostly senior roles, and remove three layers of management, in a bid to simplify the structure of its business. The energy firm has a total workforce of 27,000, of whom 20,000 are in the UK.

Bentley- 1,000 jobs
The luxury carmaker intends to shrink its workforce by almost a quarter, slashing 1,000 roles through a voluntary redundancy scheme. The majority of Bentley’s 4,200 workers are based in Crewe in Cheshire.

Aston Martin Lagonda – 500 jobs
The Warwickshire-based luxury car manufacturer has announced 500 redundancies.

British Airways – 12,000 jobs
The UK flag carrier is holding consultations to make up to 12,000 of its staff redundant, a reduction of one in four jobs at the airline. BA intends to cut roles among its cabin crew, pilots and ground staff, while significantly reducing its operations at Gatwick airport.

Virgin Atlantic – 3,000-plus jobs
Richard Branson’s airline is to cut more than 3,000 jobs, more than a third of its workforce, and will shut its operations at Gatwick.

EasyJet – 4,500 jobs
The airline has announced plans to cut 4,500 employees, or 30% of its workforce.

Ryanair – 3,000 jobs
The Irish airline intends to slash 3,000 roles and reduce staff pay by up to a fifth.

Aer Lingus – 900 jobs
The Irish airline, part of International Airlines Group (IAG) plans to cut 900 jobs.

P&O Ferries – 1,100 jobs
The shipping firm intends to cut more than a quarter of its workforce, a loss of 1,100 jobs. The company, which operates passenger ferries between Dover and Calais, and across the Irish Sea, as well as Hull to Rotterdam and Zeebrugge, will initially offer employees voluntary redundancy.

JCB – 950 jobs
Digger maker JCB said in May up to 950 jobs are at risk after demand for its machines halved due to the coronavirus shutdown.

Ovo Energy – 2,600 jobs
Britain’s second biggest energy supplier announced in May it planned to cut 2,600 jobs and close offices after the lockdown saw more of its customer service move online.

Johnson Matthey – 2,500 jobs
The chemicals company said in June it is planning to make 2,500 redundancies worldwide over the next three years. The move will affect 17% of the workforce at the firm, which is a major supplier of material for catalytic converters.

Bombardier – 600 jobs
The Canadian plane maker will cut 600 jobs in Northern Ireland, as part of 2,500 redundancies announced in June.

The Restaurant Group – 1,500 jobs
The owner of Tex-Mex dining chain Chiquito, and other brands including Wagamama and Frankie & Benny’s, said in March that most branches of Chiquito and all 11 of its Food & Fuel pubs would not reopen after the lockdown, leading to the loss of 1,500 jobs.

Monsoon Accessorize – 345 jobs
The fashion brands were bought out of administration by their founder, Peter Simon, in June, in a deal which saw 35 stores close permanently and led to the loss of 545 jobs.

Clarks – 900 jobs
Clarks plans to cut 900 office jobs worldwide as part of a wider turnaround strategy

Oasis and Warehouse – 1,800 jobs
The fashion brands were bought out of administration by restructuring firm Hilco in April, in a deal which led to the permanently closure of all of their stores and the loss of more than 1,800 jobs.

Debenhams – 4,000 jobs
At least 4,000 jobs will be lost at Debenhams as a result of restructuring, following its collapse into administration in April, for the second time in a year.

Mulberry – 470 jobs
The luxury fashion and accessories brand said in June it is to cut 25% of its global workforce and has started a consultation with the 470 staff at risk.

Jaguar Land Rover – 1,100 jobs
The car firm is to cut 1,100 contract workers at manufacturing plants the UK, potentially affecting factories at Halewood on Merseyside and Solihull and Castle Bromwich in the West Midlands.

Travis Perkins – 2,500 jobs
The builders’ merchant is cutting 2,500 jobs in the UK, accounting for almost a 10th of its 30,000-strong workforce. The company, which is behind DIY retailer Wickes and Toolstation, said the job losses will affect staff in areas including distribution, administrative roles and sales. The move will also affect staff across 165 stores that are now earmarked for closure.

With thousands of businesses forced to close permanently or temporarily ceasing trading, more than 9 million workers have been furloughed on the government’s emergency wage subsidy scheme, at a cost of about £23bn to the exchequer.

However, the government will scale back the support from the end of next month, as ministers prioritise the reopening of the economy to help companies recover.

Dodds, in her Guardian article, said winding down the furlough scheme without providing extra support to companies still unable to reopen risked triggering a jobs crisis this summer.

“The government’s one-size-fits-all approach to support schemes makes no sense – it treats industries that can open today and industries that can’t exactly the same,” she said.

In the latest measure to reboot the economy, Boris Johnson on Tuesday announced that more businesses would be allowed to reopen from 4 July, including pubs, hotels and restaurants, and physical-distancing guidelines would be downgraded from 2-metres to “1-metre-plus”. The change was expected to enable more establishments to reopen with protective measures in place.

Business leaders have, however, warned of widespread job losses for companies forced to stay closed for longer, including gig venues, theatres and other leisure and hospitality outlets. Company bosses have also sounded the alarm that profits would remain under severe pressure for months, given the ongoing Covid-19 public health risks.

In the first week that non-essential stores were allowed to reopen, shopper numbers on England’s high streets surged by 45% compared with the previous week, according to the data provider Springboard. However, footfall remained down 54% on the same week in 2019 as large numbers of people continued to stay away.

Adam Marshall, director general of the British Chambers of Commerce, said: “While the relaxation of the 2 metre rule will help more firms increase capacity, we are still a long way from business as usual. Broader efforts to boost business and consumer confidence will still be needed to help firms trade their way out of this crisis.

“Businesses also need a clear roadmap to recovery, including fresh support for the worst-affected sectors and geographic areas, and broader fiscal measures to get the economy moving again.”

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