Wind-down of furlough should go ahead tomorrow as planned, says IEA expert
30 June 2021
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Press Release
Coronavirus
Housing and Planning
Commenting on GDP figures from the Office for National Statistics showing the economy contracted by 1.6% in the first quarter of 2021, Julian Jessop, Economics Fellow at free market think tank the Institute of Economic Affairs, said:
“The decline in GDP in the first quarter is old news, but if anything the detail is encouraging. The trivial downward revision to headline GDP, mainly due to weaker consumer spending, was accompanied by an upward revision to household saving – meaning that pent-up demand may prove to be even stronger.
“More timely business surveys already suggest that overall economic activity (as measured by GDP) will be back to pre-Covid levels as soon as the third quarter, with employment picking up well. It is therefore right to press ahead with the winding down of the furlough scheme, as planned, from 1st July.
“Indeed, it is increasingly clear that the furlough scheme is now contributing to staff shortages and actually holding back the recovery, including in hospitality. With most of the economy open again, people should be encouraged to find new jobs, instead of being locked into their old ones.”
ENDS
Notes to editors
Contact: Emily Carver, Head of Media, 07715942731
IEA spokespeople are available for interview and further comment.
“The decline in GDP in the first quarter is old news, but if anything the detail is encouraging. The trivial downward revision to headline GDP, mainly due to weaker consumer spending, was accompanied by an upward revision to household saving – meaning that pent-up demand may prove to be even stronger.
“More timely business surveys already suggest that overall economic activity (as measured by GDP) will be back to pre-Covid levels as soon as the third quarter, with employment picking up well. It is therefore right to press ahead with the winding down of the furlough scheme, as planned, from 1st July.
“Indeed, it is increasingly clear that the furlough scheme is now contributing to staff shortages and actually holding back the recovery, including in hospitality. With most of the economy open again, people should be encouraged to find new jobs, instead of being locked into their old ones.”
ENDS
Notes to editors
Contact: Emily Carver, Head of Media, 07715942731
IEA spokespeople are available for interview and further comment.
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