Ending COVID-19 Job Retention Scheme To Put UK On Brink Of Double-Dip Recession - Reports

LONDON (UrduPoint News / Sputnik - 30th October, 2020) Ending UK government's COVID-19 job retention scheme amid the second wave of the pandemic and with redundancies on the rise will put the United Kingdom's economy on the brink of a double-dip recession, the Guardian newspaper said on Friday.

The government's furlough scheme, which enabled workers to receive up to 80 percent of their wages since the beginning of the coronavirus pandemic, is coming to an end on Saturday, and will be replaced by another scheme covering only two thirds of their salaries.

Citing official figures, the Guardian analysts said that about two million people are still receiving wage subsidies, and that four million people could be left jobless by the end of the year.

In an opinion piece published on Thursday in the newspaper, Conservative member of the House of Lords and former employment secretary from 1985 to 1987, David Young, urged the government to use state-backed job-creation schemes to boost employment opportunities and help people start a business.

"Government should now - for time is very much of the essence - re-create the programmes that worked so well in the past, market them actively, and encourage those newly out of work to get together either by themselves or with friends or colleagues and set up their own new enterprise," he said.

The latest reports from the Office for National Statistics show that the UK economy showed signs of recovery in August, when it grew by 2.1 percent, but still below the levels it had before the COVID-19 pandemic struck in February, while inflation rose to 0.5 percent in September, up from 0.2 percent in the previous month, influenced by transport costs and the end of the government's incentive scheme for the restaurant sector.

With COVID-19 infection rates rapidly rising in most parts of country despite the new three-tier system designed to contain the spread of the virus, the UK seems to be heading for another national lockdown, which prime minister Boris Johnson has warned would be "disastrous" for the UK economy.