Responding to the latest official labour
market statistics, showing the unemployment rate at 5.0% in
the three months to January, Tej Parikh, Chief Economist at the
Institute of Directors, said:
“The labour market is showing some signs of resilience in the
face of covid-19.
"The pandemic has led to an unprecedented rise in job losses, but
with continued support from the furlough scheme and the economy
now gradually reopening, worst case scenarios are now slowly
coming off the table. Unemployment will continue to edge up over
the year, as cashflow remains challenging, but it is likely to
peak lower than expected when the pandemic first took hold.
"Many firms are still tapping into the Job Retention Scheme to
keep staff onboard, as they navigate restrictions in the first
quarter. This has kept unemployment from rising even higher. The
extension of furlough out to September will also provide vital
support for firms as they attempt to rescale in line with the
reopening roadmap. Vacancies are likely to start growing again
meanwhile, as businesses look to bounce back as restrictions wind
down.
"The furlough scheme is helping business to bridge the pandemic.
The Government should remain prepared to extend support if the
recovery goes off kilter, and boosting the UK’s retraining and
reskilling capabilities will only become more important as the
labour market attempts to adjust to the post-pandemic economy.”
