UK unemployment predicted to hit nearly three million by Christmas

Almost three million people in the UK may be unemployed by Christmas as up to 1.5 million more jobs face the axe in the run-up to the festive season, two leading think tanks are warning.

With Covid-19 still “battering the economy” and the government’s Coronavirus Job Retention Scheme coming to an end on 31 October, more companies will be forced to lay off staff, says The Guardian. The predicted “surge in unemployment” would drive the unemployment rate above 8% for the first time in almost a decade, the newspaper adds.

The latest study from the Centre for Economics and Business Research (CEBR) found that UK businesses are planning to lay off more than a third (35%) of furloughed workers after the scheme ends this month - equivalent to 1.2 million staff.

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And a further 300,000 jobs are also at risk, according to the think tank, which is echoing Chancellor Rishi Sunak’s warning of a “tough” winter ahead.

The CEBR agrees that “as the chancellor said, he can’t be expected to save every job throughout the crisis and a readjustment of the economy will be required”.

But “as hopes for an early return to normal recede and it indeed looks like some businesses in Covid hotspots will need to close in the coming weeks and month, the chancellor needs to act now despite the fiscal cost”, the economies consultancy adds.

The Institute of Public Policy Research (IPPR) is also warning of major job losses to come.

The think tank believes that the government’s new Job Support Scheme (JSS) “will do little to halt rising unemployment”, The Times reports.

The IPPR says that almost two-thirds of the three million people presently on furlough had been working in “viable” roles - jobs that are likely to become available again once Covid-19 restrictions are lifted.

But “we find that the new schemes will only save 230,000 of these jobs. As such, 1.8 million viable jobs which could otherwise be preserved will be lost, at great individual and wider economic cost,” the experts predict.