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One million Britons could be on furlough when scheme ends, data suggests

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By Reuters
UK card spending jumped last week to 99% of pre-COVID level: ONS
UK card spending jumped last week to 99% of pre-COVID level: ONS   -   Copyright  Thomson Reuters 2021
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LONDON – Up to 1 million people could still be on Britain’s furlough programme when it expires at the end of the month, official figures suggested on Thursday after the number of people leaving the scheme had slowed.

The finance ministry said 1.6 million workers were still furloughed at the end of July, down from almost 2 million a month earlier but a slower decline than in previous months.

More up-to-date data, based on reports from businesses, suggested that the fall slowed further last month.

Britain’s statistics office said 6% of the workforce was furloughed as of Aug. 22.

“The number of people coming off furlough over the summer has slowed to a trickle, as some firms and sectors – notably overseas tourism – struggle to return to pre-pandemic levels of activity,” Charlie McCurdy, an economist at the Resolution Foundation think tank, said.

“As a result, up to a million employees could still be on furlough when the scheme closes at the end of this month.”

Finance minister Rishi Sunak, who rushed out the furlough scheme to keep people employed when the coronavirus pandemic struck last year, celebrated the fall in furlough levels to their lowest since the start of the pandemic.

He pointed to how young people in particular were getting back to work.

Bank of England officials are trying to gauge whether workers still on scheme when it expires can fill the record number of jobs currently open or become unemployed.

Earlier on Thursday the Recruitment and Employment Confederation said businesses faced the most severe shortage of job candidates on record due to the economy’s post-lockdown surge and Brexit.

BoE Governor Andrew Bailey on Wednesday said he was anxious about job vacancies not being filled. The end of the furlough scheme would help to correct this but he said he had “concern about the persistence in the labour market story”.