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UK economy experienced record fall

Published: Tuesday 30th June 2020

The Office for National Statistics (ONS) released figures showing the UK economy experienced a record fall. The economy fell 2.2% between January and March of this year – the biggest drop since 1979. Research by small firm insurers Simply Business has also estimated UK small businesses will lose approximately £69 billion because of coronavirus. Samuel Tombs, chief UK economist of research consultancy Pantheon Macroeconomics, said, “The biggest contraction for 40 years, even though Q1 contained just nine lock down days!”, adding the data, “was just the prelude”, and predicting “worse is to come”.

Selection of workers from different industries wearing their uniforms.

Are we really all in this together?

The ONS predicts around 7.6 million UK jobs were at risk during lockdown. These jobs included permanent layoffs, temporary furlough and reductions in pay and working hours. However, findings have revealed that not everyone is at equal risk. This is highlighted best by the fact nearly 50% of all jobs at risk are in occupations that pay less than £10 per hour. This gap was further highlighted by findings revealing jobs in low-income regions were more at risk than those in higher-income areas.

The jobs most at risk in UK economy

It is perhaps no surprise to learn that some sectors have fared much better than others. Management consultancy firm McKinsey & Company conducted a study of jobs at risk. The study revealed 73% of UK workers in accommodation & food services and 46% of construction employees were furloughed in April. This figure was in stark contrast to workers in water utilities (14%) and information & communication (13%).

Despite the differences in sectors being affected by coronavirus, an even bigger gap has been revealed between specific job types. It has been revealed that roughly 44% of all elementary-level jobs were at risk because of the pandemic. Jobs in this category include kitchen assistants, bar staff and cleaners. This was in sharp contrast to just 5% of professional occupations, such as accountants and computer programmers.

Female struggles to work at home whilst her children play in the back ground whilst UK economy sees record fall.

Why remote working will not become the norm

As the UK economy experienced a record fall,  a growing number of people are remote working. McKinsey & Company has revealed that around 60% of all occupations are still unable to work remotely. The company cited reasons such as the need for fixed locations and specialist equipment in certain roles. The company added that even among companies that allow staff to work from home, only a small percentage were ready to put this into practice.

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