In its November 2020 Economic and Fiscal Outlook, the Office for Budget Responsibility (OBR) forecast unemployment to peak at 7.5% in Q2 2021, down from the forecast peak of 11.9% in Q4 2020 in its July Fiscal Sustainability Report.
During the pandemic, the Government has taken unprecedented action to protect jobs, most notably through the Coronavirus Job Retention Scheme (CJRS), which was extended until the end of April 2021 for all parts of the UK. The OBR noted that the extension of CJRS, along with other new measures, was expected to reduce the level of unemployment by around 300,000 in the second quarter of this year, relative to what would have happened in the CJRS’ absence. As at 31 December, 700,000 employers were using the scheme to furlough more than 3.8 million jobs.
While the Government has taken extensive action to protect jobs, a comprehensive package of support is in place to help those who have unfortunately lost their job, helping them find work and build the skills they need to get into work. This includes: doubling the number of work coaches in Jobcentre Plus by March 2021; the £2.9 billion Restart programme, which will provide intensive and tailored support to over 1 million unemployed people and help them find work; and the £2 billion Kickstart Scheme which will create hundreds of thousands of new, fully subsidised jobs for young people across the country.
The Chancellor has always been clear that the Government would keep the situation under review, adapting its approach as the context evolved. The Budget on the 3 March will set out the next phase of the plan to tackle the virus and protect jobs.