Rishi Sunak, the Chancellor of the Exchequer, presented the 2021 Budget to parliament on 3rd March – revealing the £407bn cost of Coronavirus to the economy. Although Sunak forecasted a rapid return to economic growth, he acknowledged that the pandemic will continue to do damage for years to come. Here are some of the key takeaways:
The UK economy shrank by 10% in 2020 (the biggest fall since 1709) but there is a projected annual growth of 4% this year, and things are set to return to pre-Covid levels by the middle of 2022 – so it’s not total doom and gloom. Unemployment, however, is a different story: levels are expected to peak at 6.5% next year, though that’s still lower than the 11.9% that was previously predicted. Overall, the UK’s budget deficit will be £355bn this year – a peacetime record.
Furlough and jobs
More than 700,000 people have lost their jobs during the pandemic, and hundreds of thousands have been furloughed. Sunak has extended the furlough scheme until the end of September and employees will keep receiving 80% of their wages until then – but bosses will be asked to contribute 10% in July and 20% in August and September as the scheme is phased out.
While this all sounds positive news, remember that it’s been proven young women are some of the most likely workers to be furloughed. While these measures are designed to protect them from redundancy, many will have been dealing with an income that’s been a fifth less than they had anticipated over the course of 18 months.