UK to be worst-hit G7 economy in first quarter as 2.5 million could be unemployed by end of the year

The UK will be among the worst-hit big economies on the planet within the first three months of the year, according to a new forecast, as the expected economic performance for 2021 was downgraded.

The UK's gdp (GDP) is only going to rise by 3.4% across the year, denting about a so-called V-shaped recovery from the economic harm caused by the Covid-19 pandemic.

The forecast, from the National Institute of monetary and Social Research (NIESR), is really a downgrade in the think tank's previous estimate of 5.9% growth in the past year.

It said that the economy continues to contract during the current quarter, which began with different types of lockdown in position over the whole country.

Across the three months, the UK's GDP will be the worst hit of any from the Number of Seven (G7) large economies on the planet.

Japan

The forecasted drop of nearly 9% within the quarter would be a lot more than twice the expected decline in Japan, the second-worst hit country in the G7, NIESR said.

“Early indications are the lockdown in the first quarter has a bigger impact on activity than in November, but an inferior impact than the spring 2021 lockdown,” it said.

The economic shock implies that as many as 2.5 million people in the country could be unemployed before the end of the season, unless the Government acts to increase the furlough scheme to support jobs.

More than lb46 billion has been paid in furlough cash because the scheme launched in May, supporting around 10 million jobs.

However, the scheme is a result of arrived at a close at the end of March this year.

Unemployment

NIESR asserted in the “main-case forecast scenario, unemployment is expected to rise significantly following the end of these schemes in April, reaching 7.5% or 2.5 million people by the end of the year”.

It added: “To prevent a boost in unemployment of the magnitude from the forecast, and also to limit the economical and social 'scarring' from the public health crisis, the Chancellor should soon announce policies to support the labour market beyond April.

“The pace and path of the recovery is determined by state-contingent and targeted policy interventions.”

Around 2,500 jobs lost as Boohoo snaps up high street brands

Around 2,450 staff are now being told on Monday their jobs have been axed after clothes website Boohoo bought Dorothy Perkins, Wallis and Burton for lb25.2 million.

The deal is perfect for the inventory, e-commerce and digital assets from the businesses, which were of Sir Philip Green's Arcadia retail empire if this entered administration in December.

But it doesn't include the brands' 214 remaining shops, that will close, according to administrators from Deloitte.

Staff were emailed on Monday morning, and will also be informed throughout the day.

Around 260 jobs, mainly hq roles, is going to be saved because they move with the brands to Boohoo. Included in this are jobs in design, buying and merchandising, and also the businesses' digital wings.

Some other staff is going to be kept on throughout a months-long transition period, Deloitte said.

The deal will see the brands transfer over to online fashion giant Boohoo, whose fortunes have increased as the ones from its high-street predecessors waned.

Last month Boohoo said it had bought the company and website of mall chain Debenhams for lb55 million. But it did not undertake the company's 118 stores, meaning around 12,000 jobs were apt to be lost.

Arcadia was long one of the biggest players around the UK high street, however the Covid-19 pandemic dealt your final blow towards the business, which had struggled having a shift in shopping behaviour recently.

In December it entered administration, putting thousands of jobs at risk.

While their demise has been partly brought about by a shift to online retail, its brands will continue to live online, after several deals.

Last week Boohoo rival Asos, also a web-based player, signed a lb330 million deal to purchase Topshop, Topman, Miss Selfridge and HIIT from Arcadia.

Administrators have finally sold all Arcadia's brands, raising around lb500 million to repay creditors. There's still some property in the portfolio left to market.