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Furlough cannot last forever

Tuesday, March 23, 2021

The UK unemployment rate for the last recorded quarter that encompassed two separate lockdowns in the UK came in at 5%, slightly better than estimates of 5.2% and an improvement of 0.1% on the previous quarterly report. The extension of the furlough scheme by Chancellor Sunak has helped massage these numbers down and avoided further damage to the economy in the short run. With the hoped-for re-openings on the horizon, UK employers will be looking to fill back workforce that had been shed during the pandemic. While the total number of payrolls remains close to 700,000, lower than just before the pandemic struck, the government likely hopes that with the rapid vaccine rollout, UK employers will help close the unemployment gap over the coming quarters – furlough after all cannot last forever.

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