- Nearly 4% of all staff still were furloughed in September, yet redundancies appear to have remained low.
- Involuntarily part-time working, however, likely became much more widespread in Q4.
- October's labour market data will be partial and might not offset concerns about the recovery's strength.
Samuel Tombs (UK Economist)U.K.
- The OBR likely will revise smaller its "scarring" estimate only to 2.5% of GDP, from 3.0% previously.
- The resulting uplift to future tax revenues will be offset by higher projections for interest payments.
- Mr. Sunak will have little, if any, headroom in meeting his target for a balanced current budget in three years' time.
Samuel Tombs (UK Economist)U.K.
- The labour market continued to tighten in Q3, but employment and hours still were below their potential.
- Labour supply likely has increased much more than labour demand in Q4, now that the CJRS has ended.
- Unit wage costs were kept in check by a productivity rebound; rising labour supply will cool wage growth in Q4.
Samuel Tombs (UK Economist)U.K.
- Furlough scheme usage fell only marginally in August; 4.6% of staff still were furloughed by month-end.
- Furlough rates remain high at small businesses, who lack the financial muscle to bring all staff back.
- We expect only a modest rise in the unemployment rate to 5% in Q4, but a big jump in underemployment.
Samuel Tombs (UK Economist)U.K.
- Public borrowing in August was only slightly below the OBR's forecast; interest payments are picking up.
- We think the OBR will revise its long-term "scarring" estimate only to 2.5%, from 3.0% previously...
- ...The workforce has continued to contract this year, confounding the OBR's hopes of a rebound.
Samuel Tombs (UK Economist)U.K.
- The number of workers on furlough decreased again in July, as government contributions were tapered...
- ...But usage remains high in sectors that already have fully recovered, and among financially-weak SMEs.
- We expect the unemployment rate to rise to 5.0% in Q4, from 4.5% in Q3; hidden slack will rise much more.
Samuel Tombs (UK Economist)U.K.
- Employee numbers have rebounded since the spring, but total employment is lagging behind.
- Vacancies are high, but are concentrated in different sectors to those which will see post-furlough layoffs.
- High inflation and 4-to-5% unemployment didn't lift wage growth in 2017, and probably won't this time.
Samuel Tombs (UK Economist)U.K.
The proportion of staff furloughed fell to 5.7% at the end of June, from 7.5% a month earlier...
...But surveys point to only a marginal fall in early July, and still high usage in fully recovered sectors.
Firms likely won't fully relinquish recent productivity gains; the employment rate will drop back in Q4.
Samuel Tombs (UK Economist)U.K.
