Rishi Sunak has released a film about the leave program as the job retention program draws to a close.
The Chancellor tweeted a Hollywood-style video documenting the origins of the program put in place at the start of the pandemic when many businesses were forced to shut down.
It features several companies who have said they would have gone to the wall without government help, with one saying she “dreads thinking about what would have happened without it.”
Others said the consequences could have been “absolutely heartbreaking”.
End of leave
The leave, the state’s largest intervention in Britain’s peacetime labor market, ends this week.
The wage subsidy has been in place for 18 months and has cost the taxpayer £ 70bn.
But there are concerns about what will happen to the more than one million workers still on leave once employers are required to pay their wages in full.
TOAt the Bank of England’s September meeting, its Monetary Policy Committee (MPC) said the number of full-time and part-time leave jobs continued to decline but to a “significantly lower degree” to what he estimated in his quarterly update on the economy in August.
The Bank said the slower pace of withdrawing people on leave coupled with record vacancies meant the labor market was hard to read: “Key questions include how the economy will adjust to the shutdown of the labor market. leave plan at the end of September; the extent, impact and duration of any change in unemployment; as well as the degree and persistence of any difficulty in matching available jobs with workers.
Samuel Tombs, UK economist at Pantheon Macroeconomics, said he doubts the economy will grow fast enough next month for companies to fully rehire all 1.6 million employees who were still on leave at the end of July.
“While the unemployment rate will likely only increase to around 5% in the fourth quarter of 2021, from 4.5% in the third quarter, we expect underemployment to increase sharply as people return to their homes. former employers, but are working fewer hours than they would like.
“As in the early 2010s, this reservoir of ‘hidden’ sub-activity in the labor market is expected to exert considerable downward pressure on wages.”
The Bank will closely monitor the impact of the end of the program, with the MPC noting that there was a “high option value” in seeing how the labor market fared before raising rates. interest.
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