UK job market hits brick wall during virus lockdown: REC
Demand for labour contracted at the fastest pace in the 22-year history of the monthly Report on Jobs published by the Recruitment and Employment Confederation trade body and accountants KPMG.
The figures chimed with other signs that Britain is in the midst of a historic collapse in economic output after measures to slow the spread of the coronavirus forced company closures across the country last month.
A recent Reuters poll of economists suggested the economy is on course to contract by around 13% in quarterly terms in the three months to June.
The Bank of England, which has already cut interest rates to historically low levels and ramped up its bond purchases by a record amount, could announce further stimulus later on Thursday when it publishes its May policy decision at 0600 GMT.
“The COVID-19 pandemic continues to wreak havoc on the UK jobs market with a record drop in vacancies and recruitment plans frozen,” said James Stewart, vice chair at KPMG.
Separate reports from industry groups Make UK and the Institute of Directors (IoD) report suggested it may be a long road to recovery.
More than half of the companies surveyed by the IoD this month said it would take them more than a month to return to pre-lockdown levels of activity, even if restrictions were lifted entirely.
“Leaving lockdown, when it happens, won’t be plain sailing for business. Social distancing presents an unprecedented challenge for firms, and some may be simply unable to make it work,” Jonathan Geldart, director general of the Institute of Directors, said.
Around half of the 816 companies in the IoD survey thought they could return to pre-lockdown levels of activity with social distancing in place, but a fifth said they would be working at less than half capacity or could not operate at all.
“Many small firms may need support accessing protective equipment to get up and running again. Employers will need flexibility as the furlough scheme is unwound to manage the return to work,” Geldart said.
More than a third of the almost 300 manufacturers in Make UK’s survey said they did not expect trading to return to normal for six to 12 months after the COVID crisis ends.
Another 17% said it would take over a year to recover.
(Source: Reuters)
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