Rising Unemployment in Britain? High Uncertainty About Fate of Furloughed Staff

According to former BOE MPC member, Danny Blanchflower, Britain’s unemployment rate could soar to as high as 20%, with uncertainty about whether over 3.2 million furloughed workers will get back their jobs at the end of the lockdown. In February, Britain had recorded an official unemployment rate of around 4%, which could surge as a result of the heightened economic uncertainty in the wake of the coronavirus pandemic.

Since the lockdown was announced in March, more than 1.5 million people have signed up for unemployment benefits. In addition, companies across the country have sent over 3.2 million workers on temporary leave to avail the government’s wage subsidy program.

Blanchflower estimates that the actual number of furloughed staff could be much higher than official estimates, and while he sees some of them returning to the workforce as restrictions ease and the lockdown is lifted, businesses may not be in a condition to reabsorb all of their staff. Business conditions are expected to recover at a slow pace and companies can only hire or re-hire their workers as long as they “are solvent and have a market to sell to.”

An extended lockdown increases economic risks for companies, leaving them strapped for cash even as incomes come to a standstill but operating costs continue to weigh. Even when the lockdowns are lifted, consumers are likely to remain cautious about consumption, making it harder for businesses to generate revenues amid consumers’ belt tightening measures.

Check out our free forex signals
Follow the top economic events on FX Leaders economic calendar
Trade better, discover more Forex Trading Strategies
ABOUT THE AUTHOR See More
Arslan Butt
Index & Commodity Analyst
Arslan Butt serves as the Lead Commodities and Indices Analyst, bringing a wealth of expertise to the field. With an MBA in Behavioral Finance and active progress towards a Ph.D., Arslan possesses a deep understanding of market dynamics.His professional journey includes a significant role as a senior analyst at a leading brokerage firm, complementing his extensive experience as a market analyst and day trader. Adept in educating others, Arslan has a commendable track record as an instructor and public speaker.His incisive analyses, particularly within the realms of cryptocurrency and forex markets, are showcased across esteemed financial publications such as ForexCrunch, InsideBitcoins, and EconomyWatch, solidifying his reputation in the financial community.
Related Articles
Comments
0 0 votes
Article Rating
Subscribe
Notify of
0 Comments
Oldest
Newest Most Voted
Inline Feedbacks
View all comments

Add 3442

Add 3440

XM

Best Forex Brokers