UK Jobs crisis set to be even worse than feared, warns senior Bank of England economist
A senior Bank of England official has warned Britain’s jobs crisis is likely to be worse than it feared after a surge in redundancies.
Gertjan Vlieghe struck a far more downbeat tone that the Bank’s chief economist Andy Haldane who has hailed Britain’s rapid economic recovery.
With just 11 days before the closure of the Government’s job retention scheme, Vlieghe said around 9 per cent of workers – roughly 2m people – remain furloughed.
Gertjan Vlieghe (pictured) struck a far more downbeat tone that the Bank’s chief economist Andy Haldane who has repeatedly hailed Britain’s rapid economic recovery
Although many are likely to be rehired or find work, he is concerned by the sharp rise in redundancies, with vacancies at 60 per cent of the level they were this time last year.
He added: ‘There is huge uncertainty, but in my view, the risks are skewed towards even larger losses, implying even more slack in the economy than our central projection.’
If the unemployment rate hits the Bank’s forecast of 7.5 per cent by the end of 2020, the total would soar from around 1.5m to 2.6m.
Figures last week showed unemployment at a three-year high of 4.5 per cent between June and the end of August.
Many firms are warning that the Government’s tiered restrictions just as the job retention scheme is poised to close will them to lay off more staff.
Vlieghe, a Belgian-born economist on the Bank’s Monetary Policy Committee, which sets interest rates, said the economy was 9 per cent smaller in August than in February, before the crisis, adding: ‘We are currently, at best, at the trough of a normal to large recession’.
With this in mind, he said the Bank is more likely than not to do more to stimulate the economy.