IoD responds as unemployment rises to 5%

Responding to the latest official labour market statistics, showing the unemployment rate rose to 5%in the three months to November, Tej Parikh, Chief Economist at the Institute of Directors, said:

“The pandemic continues to rip through the labour market.

“A return to tighter restrictions late last year will have stretched businesses’ ability to retain staff. Meanwhile, the furlough scheme will have provided an invaluable cushion for many firms, preventing unemployment from edging up even further.

“It is now crucial that the Job Retention Scheme and other Covid-19 economic support is extended beyond the spring to support employment as restrictions continue. The latest lockdown will have only added further pressure on firms with troubled balance sheets, which means more jobs are likely to be lost in the coming months.

“The forthcoming Budget is a vital moment to help firms retain, retrain and rehire workers as the vaccine rolls out. In particular, the government should provide a relief for employers’ National Insurance contributions and support reskilling opportunities to shore up the recovery.”