Brits are being warned to prepare for the possibility there could of a “sudden and unexpected shock” with a cliff edge of redundancies.
Millions of employees have been helped by the furlough scheme who would have lost their jobs, but the scheme is now tapering down this week until it completely end in September.
Currently the government are paying 80% sum of employees pay, which will go down to 70% on 1 July, then the last two months of the scheme, August and September it will fall to 60%, then stop.
Sarah Coles, personal finance analyst at Hargreaves Lansdown, expressed optimism of possible job retention, but urged caution when furlough ends.
Coles said, “The tapering of furlough is unlikely to widen job losses this time round.
“Last time, when the support for jobs was kicked away, employment collapsed, but this time round both the economy and the jobs market are on a much firmer footing.
“However, an awful lot still remains in the balance.
“Of course, if there’s anything that the past 18 months has taught us, it’s that we can’t rule out a sudden and unexpected shock.
“The Bank of England has warned that people who gave up looking for a job during the pandemic (possibly because they were shielding or because they had given up hope) could start looking again as they are vaccinated or as they see vacancies increase.
“This could mean a rise in unemployment as well as employment. Meanwhile, with infections on the up, there’s always the risk of more delays to the economy reopening, and even the outside possibility of more closures.
“It means unemployment has the potential to catch us by surprise.”