New investigations into business activities have raised concerns about pre-Christmas slump due to the latest COVID-19 restrictions. According to two separate research by accounting firm BDO and the Human Resources and Development Institute (CIPD), which was chartered in collaboration with recruitment firm Adecco, lockdown 2.0 has come into full swing and spread to storefronts, with thousands already jumping into the negative.
BDO figures showed the first decline in business trust and production since April, when the economy was still grasped by the first wave of government restrictions, but the latter survey hopes that almost a third of employers will be redundant by the end of the year.
This all came to light despite government attempts to strengthen the economy during the winter, Prime Minister Rishi Snack announced that the coronavirus retention system will continue until March, and that the Bank of England’s £150 billion support package is designed to ease the financial blow of the second lockdown.
Gerwyn Davies, senior labor market advisor at CIPD, commented on the findings of the survey.
“What I can say is that the situation is getting worse and worse. Employment appears to continue to decline, and the relatively weak demand for labor means it will be a long, intense winter, especially affecting younger job seekers.”
Nevertheless, the slightly looser nature of the second lockdown should allow more companies to continue to be open to the public, and most companies have already taken staff earlier this year, so the number of companies preparing to show redundancy has actually dropped to 30% compared to 33% since the summer.
That figure is still significantly higher than 22% of companies that had planned to recruit before the coronavirus hit the UK, and arguably the 3% difference isn’t comfortable for millions of people who could face unemployment even after grabbing jobs during the first wave.
BDO said the business output metrics compiled from a survey of over 4,000 companies showed that the economy has achieved leaps and boundaries since the record 44.9 recorded in April was recorded. However, the October figures are sitting at 77.09 (well below the 95 threshold for economic growth), and with already slipping from 77.95 in September, it is clear that the UK economy is facing a downhill slope towards the end of the year.
More figures on the state of the economy are expected to be released this week, but the Bank of England has already warned that the second covid wave could cause a double recession, with GDP expected to fall by 2% in the final quarter. To turn the cake into ice, the bank expects GDP to fall by 11% this year.
