Jobs crisis could trigger extended holidays, economists warn Business

Philip Shaw, chief economist at investment bank Investec, said further measures would depend on the trajectory of the virus. He added: “It is very possible that more money from the Consolidated Revenue Fund will flow into the new holiday program.

“The vaccine rollout is important here, but you also have the possibility of a no-deal Brexit. It is a non-Covid event but one that could disrupt the economy in a way that persuades the Chancellor to extend.”

The Office of Fiscal Responsibility watchdog estimated the cost of extending the leave until March at £ 22bn, in addition to the £ 40.5bn injected into the program through the end of October .

The Treasury stressed that it had extended the program “to give businesses the certainty they need to plan during the winter months,” but declined to comment on an extension beyond March.

Businesses are in shock as 10 million people are hit by tighter restrictions, with London and parts of the South East placed under Level 3 rules where pubs and restaurants are forced to close.

Paul Dales, UK chief economist at Capital Economics, said: “If the government is forced to maintain the restrictions – whether through tiers or lockdowns – beyond March, I think it will be. ‘he is obliged to continue the permission.

“It seems more likely that fiscal policy will be loosened rather than tightened next year … whether through an extension of the holiday, or more subsidies to businesses.”

The warnings came as figures revealed more than 100,000 people over the age of 50 joined the ranks of the unemployed in the quarter, with tens of thousands facing early retirement or poverty.

Unemployment rose to 378,000 for people aged 50 to 64, with a record 99,000 unemployed in the last quarter, the ONS said. In addition, 7,000 people over 65 have also lost their jobs.

The crisis meant that many over 50s found themselves out of work during the critical years leading up to retirement.