The Government has reported a big increase in applications for Universal Credit as the scale of the financial impact of the coronavirus outbreak becomes apparent.
Almost half a million people have registered in the past nine days to claim Universal Credit, hinting at the scale of the coming surge in unemployment as a result of the coronavirus outbreak.
The Resolution Foundation think-tank said the number of applications received in just nine days was greater than successful claims for Jobseeker’s Allowance made in any month following the 2008 crash. Paul Johnson, director of the Institute for Fiscal Studies, said the figure represented “dramatic early evidence of the scale of the hit to the economy and people’s living standards”.
Capital Economics predicts that 700,000 jobs could be lost should the UK economy shrink by 15% in the three months to June due to the coronavirus crisis, but that the measures taken by the government will save 900,000 jobs. Investment bank Nomura forecasts unemployment will rise to 8.5% in the next quarter.
Meanwhile, the Institute for Fiscal Studies says going ahead with the planned increase in the UK’s national living wage in April could threaten jobs at this time and that the rate might even need to be cut during the emergency. The Resolution Foundation also called for the postponement of the planned rise in the national live wage.
Some employers are responding to the uncertainty by suspending planned job cuts. Lloyds, for instance, is suspending 780 job cuts across its branches in response to increasing demand for loans and uncertainty over how many of its staff may need to self-isolate. The BBC has also delayed plans to cut 450 journalism jobs because of the coronavirus outbreak and HSBC has said that the majority of redundancies related to an overhaul of the lender would be postponed because of the coronavirus pandemic. Deutsche Bank is also suspending cuts and Virgin Money is reported to be considering freezing plans to close or merge 52 branches across the UK. Barclays also announced plans to halt redundancies during the pandemic and Nationwide said there would be no compulsory redundancies this year.