Companies reliant on spending by consumers – many of which only reopened in recent weeks after the lockdown – cut jobs at the fastest pace on record, according to a survey published on Thursday by the Confederation of British Industry.
Business and professional services firms reported the steepest declines since May 2009.
Companies expected job losses to slow slightly in the next three months but the CBI said government action was urgently needed.
“As we head into the autumn, the UK needs a bold plan to protect jobs as the job retention scheme draws to an end, to support the services sector,” CBI economist Ben Jones said.
Finance minister Rishi Sunak has rejected calls to extend his huge Coronavirus Job Retention Scheme beyond Oct. 31. Since the start of this month employers have had to pay a share of its costs.
Britain’s unemployment rate is expected to almost double to 7.5% by the end of 2020, according to the Bank of England, and many economists think it will go higher than that.
The CBI survey showed volumes of business dropped less severely than in the three months to May and companies expected the pace of decline to moderate further in the coming months.
Business and professional services firms were holding up better than companies in consumer services, but Jones said they faced additional uncertainty over Britain’s unresolved future trading relationship with the European Union.
Business and professional services reported a small uptick in sentiment, and confidence fell at a slower pace among consumer services firms after a record plunge in the three months to May.
But the outlook for investment intentions remained bleak. Business and professional firms expected to cut back on vehicles, plant and machinery, land and buildings and training over the next 12 although IT investment was expected to rise.
Source: Economy - investing.com
