Unemployment has been carefully observed during the coronavirus pandemic which many economists predict will skyrocket as many households face financial hardship. New Office for National Statistics data showed younger workers are bearing the brunt of the job losses so far, but a new report indicates further unemployment is likely to impact London in particular.
Unemployment could rise to 11.78 percent due to the “painful legacy” of the coronavirus pandemic according to town hall chiefs.
The number of people out of work could hit 580,000 by February next year according to new figures.
The unemployment rate in the capital is set to hit 9.4 percent, equating to 464,000 economically active residents in December, according to forecasts, outlined as the “core scenario”.
The information was compiled by economic consultancy Volterra Partners for the cross-party London Councils group and found the ongoing impact of the Covid crisis will continue to affect employment levels even beyond when lockdown easing has completed.
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The report revealed the varying levels of predicting unemployment across different demographics and different parts of the capital.
Central London boroughs will be the worst impacted.
The report outlines how Westminster, Southwark, Hackney, Lambeth, Camden, Haringey, Islington, Kensington and Chelsea, City of London, Lewisham, Tower Hamlets and Wandsworth would see the biggest rise in unemployment to 9.3 percent.
This would equate to 169,000 job losses under the “core scenario”.
East London boroughs including Barking & Dagenham, Bexley, Enfield, Greenwich, Havering, Newham, Redbridge, Waltham Forest and Bromley would have persistently higher levels of unemployment.
The peak of this unemployment in these areas would hit 9.3 percent, equating to 133,000 jobs.
Across West London, including the boroughs of Barnet, Brent, Ealing, Hammersmith & Fulham, Harrow, Hillingdon and Hounslow, would see the unemployment peak hit 10.4 percent which equates to 113,000 jobs.
In these areas, the especially high rate of unemployment would be driven by the dominance of sectors particularly impacted by Covid restrictions including airports.
Croydon, Kingston, Merton, Richmond and Sutton in South London would see a peak of 7.6 percent or 48,000 job losses.
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London’s unemployment rate has generally always been much higher than in other regions of Britain.
The gap between London and other regions of England has been narrowing in recent years.
However, following the pandemic, the gap will likely widen again.
As of December 2020, the capital’s unemployment rate was 7.1 percent, compared to 5.2 percent across the UK more widely.
Clare Coghill, London Councils’ executive member for skills and employment, said: “This analysis paints a grim picture of worsening job losses.
“Unemployment on this scale will have serious and long-lasting consequences – including widening London’s economic and social inequalities even further.
“With unemployment set to be one of the key concerns of the coming months and years, we need an urgent reset of the government’s approach to tackling this issue.
“Rather than top-down, centralised structures, the Government must empower local authorities to develop local solutions for helping our residents back into work.”