UK’s support for 12.1m jobs adds to pressure on Sunak

Bloomberg

The number of jobs supported by the UK government’s pandemic support exceeds 12 million, highlighting the scale of the task facing Chancellor of the Exchequer Rishi Sunak as he prepares to announce his latest economic strategy on Wednesday.
While the rate of increase in the use of the furloughing program and the self-employed plan has slowed since the height of the crisis, the two programs are now supporting 12.1 million jobs at a cost of more than 35 billion pounds ($44 billion).
The furlough program, which currently pays 80% of a worker’s wage, is due to begin to wind down from August, with employers gradually taking on more of the burden. Sunak is expected to use the speech on Wednesday to say how he’ll protect jobs as support is withdrawn.
Separate data showed the the government has paid out 45 billion pounds to more than 1 million firms across its three lending programs.
Two million owner-managers left out of the available rescue packages will have their interests represented by a new All-Party Parliamentary Group launching on Tuesday. It will lobby the government on behalf of proprietors of limited companies that pay themselves via dividends.

UK productivity challenge worsens
The UK’s already dismal productivity performance worsened in the first quarter as the Covid-19 crisis intensified.
The headline measure of output per hour fell 0.6% in January to March from a year earlier, while output per worker slumped 3.1%, the Office for National Statistics (ONS) said on Tuesday. Unit labour costs climbed 6.2%, the biggest jump since 2006.
Productivity likely deteriorated further in the second quarter when Britain felt the full force of government coronavirus restrictions on activity and many employees were either furloughed or working from home. The country went into lockdown on March 23. Data for April to June will be published on October 7, the ONS said.
The government’s furlough program has caused a disparity between output per hour and output per worker, which typically are closely aligned, by causing employment to stay in line with pre-pandemic levels, whereas hours worked have fallen. Output per hour was hardest hit in real estate activities, with a slump of 10.5%.