End of furlough scheme brings economic cliff-edge, says Chief Economist

Comment on this morning’s unemployment figures from the Chief Economist at Equals, Jeremy Thomson Cook, as he warns the end of the furlough scheme will present a cliff-edge, statistically and economically, and says longer-term government stimulus is needed to ensure the gap between the end of the shceme and a rise in employment is not larger than it needs to be.

Jeremy Thomson Cook, Chief Economist at Equals (part of the Equals Group) says: “The latest UK unemployment release confirms two things; the true level of those out of work has been very effectively lowered by the government’s furlough scheme but, more importantly when thinking about a recovery, the level of employment has continued to fall as those who have lost their jobs through the pandemic have not yet found their next role.”

“The number of hours worked in the UK– the best metric for work completed through the furlough period – also continued to fall to record lows.”

“Unfortunately, the end of the furlough scheme will present a cliff-edge, statistically and economically, for those currently relying on government support to make up their wages. Longer-term government stimulus to create jobs is needed to ensure the gap between the end of the furlough scheme and a rise in employment is not larger than it needs to be.”