Rishi Sunak admits ‘hard times are here’ as UK economy shrinks by more than a FIFTH
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Offering a downbeat assessment of Britain’s economic woes, the Chancellor also said “many more people” would lose their jobs in the months ahead. The Office for National Statistics (ONS) confirmed that around 695,000 UK workers have been removed from the payrolls of British companies since March when the coronavirus lockdown began. Meanwhile, unemployment increased by 62,000 to 1.4 million for the three months to July.
It said the rate of unemployment therefore increased to 4.1 percent, in line with analyst expectations.
This was the first time the jobless rate has increased since the pandemic spread across the UK.
Companies have continued to announce redundancy programmes through the pandemic, with London City Airport the latest to reveal cuts as it announced 239 jobs losses on Monday.
The ONS said the increase in unemployment has particularly impacted young people, as it revealed a 76,000 rise in the number of unemployed people aged between 16 and 24 over the past year.
Meanwhile, the number of people in employment dropped to 32.98 million, falling 12,000 since the previous quarter.
Responding to the gloomy figures Mr Sunak said: “I’ve said before that hard times were ahead, and today’s figures confirm that hard times are here.
“Hundreds of thousands of people have already lost their jobs, and sadly in the coming months many more will,” he said, adding: “I can assure people that nobody will be left without hope or opportunity.”
The ONS also confirmed the country’s first recession since the financial crisis – revealing the economy shrunk by 20.4 percent between April and June.
In an interview with Sky News, Mr Sunak said he was confident the UK economy would recover as people adjusted to a “new normal” after the easing of lockdown restrictions.
“As people get back to going shopping, or going out for a meal, or indeed getting back to their office, they will see that it’s a new normal, it’s a safe normal.”
Asked why the UK has been hit harder than other G7 economies, Mr Sunak said: “Social activities – for example going out for a meal, going to the cinema, shopping – comprise a much larger share of our economy.”
Labour’s shadow chancellor Anneliese Dodds blamed the government for failing to take enough action to prevent mass unemployment. “A downturn was inevitable after lockdown – Boris Johnson’s jobs crisis wasn’t.”
Nye Cominetti, senior economist at the Resolution Foundation, said: “The reopening of the economy this summer after lockdown may have boosted economic activity, but it has not spurred a recovery in the jobs market, with unemployment and redundancies rising sharply in July.
“Coming before the Job Retention Scheme that is still supporting millions of workers began its phase-out, this points to an extremely challenging autumn for employment.
“All the evidence is point to a mounting jobs crisis across Britain.”
Despite the dire figures Domino’s has revealed it is creating 5,000 jobs as it continues to benefit from people staying home amid the coronavirus pandemic.
The new positions will include pizza chefs, customer service workers and delivery drivers, and are on top of the 6,000 jobs Domino’s said it has already created since the start of the pandemic.
The jobs being created follow similar announcements from supermarkets, online retailers and courier firms, who have all increased their workforces due to surging demand during the pandemic.
However, the new roles at the likes of Amazon, Tesco and DPD fall well short of the expected losses in the hard-hit retail and leisure industry.
Estimates from the Centre for Retail Research found that more than 125,000 jobs have been lost in the UK shopping sector.
And leisure industry trade body UK Hospitality warned over the weekend that 450,000 of the one million workers in the pubs and hospitality sector who are still on furlough could lose their jobs.
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