J.P. Morgan: UK labour market likely to deteriorate

J.P. Morgan: UK labour market likely to deteriorate

Verenigd Koninkrijk
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The UK government’s job retention scheme covers 80% of the income of employees who have been furloughed, up to £2,500 per month.

While it is clear that there has been a huge take up of the scheme, with nearly 70% of businesses using the scheme to pay some of their staff, the latest unemployment claims data suggest some people are still losing their jobs. Claims for unemployment benefits rose to 5.8% in April, suggesting that the unemployment rate will move higher in the coming months. We are wary that policymakers around the world could struggle to prevent lasting scars to labour markets, which in turn could lead to a slower economic recovery.

% rate

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Source: ONS, Refini tiv Datastream. J. P. Morgan Asset Management. Data as of 22 May 2020.