Londoners most vulnerable to long-term job shocks after furlough ends

Londoners are the most vulnerable to suffering long term career damage after the furlough scheme ends today.

Research by the Institute for Fiscal Studies (IFS) found just over two in five Londoners who were made redundant during the pandemic had found new work within six months, compared to 58 per cent in the UK.

Depressed reemployment rates signals joblessness may rise sharply after the job support scheme ends, the IFS warned.

The rapid pivot toward remote working has damaged the long term health of the capital’s job market and slowed its recovery from the pandemic induced slump.

Vacancies in London jumped eight per cent between mid September 2019 and and the same period this year, compared with a UK average of 24 per cent.

Fewer office workers in the capital’s centre has reduced demand for food and entertainment, the IFS said. According to the Office for National Statistics, seven in 10 workers are back in the office.

“Despite the protection of the furlough scheme, the pandemic has hit London hard,” Adam Salisbury, research economist at the IFS, said.

“London had higher-than-average furlough rates this summer, higher redundancies and lower chances of finding new work after redundancy. It has also not seen the very large rises in vacancies seen in most parts of the UK.”

“All this combines to leave Londoners at higher risk of longer-term unemployment.”

Separate data indicates the return to normal levels of activity in London has improved business optimism.

Business confidence in the capital soared 21 percentage points to 62 per cent in September, according to Lloyds Bank.

Becci Wicks, regional director for London at Lloyds Bank Commercial Banking, said: “The increase in business confidence in early September reflects the city beginning to return to something resembling normality, with firms across the capital eager to plan ahead and, in many cases, make up for lost time.”