Young workers and the worst paid are the most likely to be affected by the closure of businesses amid the coronavirus lockdown, a study says.
A “remarkable concentration” of workers under 25, women and the worst paid will be hit by the economic effects.
That’s according to the research by the Institute for Fiscal Studies (IFS).
It sparks “serious worries about the effect of this crisis on the young especially and on inequality,” said Xiaowei Xu, an IFS economist.
In mitigation, “in the short run, many will have the cushion of the incomes of parents or other household members,” she said.
The research comes as the UK’s confidence in the economy has fallen to its lowest in 12 years as the COVID-19 crisis drains consumer confidence.
The last time such a decline happened was during the 2008 economic downturn.
Market research firm GfK’s consumer confidence gauge dropped to -34, a decline of 25 points compared to just two weeks earlier.
It suggested record grocery sales were not enough to counteract the “stark” outlook for the retail industry.
GfK asked people in mid-March and at the end of March how confident they were about a number of areas such as personal finance and the general economic situation.
Data showed that many are now expecting their personal and household’s financial position to worsen over the next 12 months.
“Our falling confidence in our personal financial situation and the wider economy reflects the new concern for many across the UK,” said Joe Staton, GfK’s Client Strategy Director.
The UK’s supermarkets had their best month on record as shoppers rushed to stockpile ahead of the coronavirus lock-down.
Market data provider Kantar revealed last week that overall sales were up 20.6% in March.
It said that the average household spent £63 more than usual during this period.
However, Mr Staton warned the latest data shows that consumers plan on withholding from making many unnecessary purchases during the current period of economic uncertainty.
He suggested it could spell disaster for many high-street chains which are already under pressure due to the forced closure of stores.
Universal Credit spike
“Despite record grocery sales, and recent peaks for purchases of freezers, TVs and home office equipment as people prepared for a long period in the home, the Major Purchase Index is down 50 points – a stark picture for some parts of the retail industry in the short to medium term,” added Mr Staton.
It was claimed this week that that 20% of small businesses could fold in April due to the collapse in consumer demand, despite unprecedented government intervention to support jobs.
The Department for Work and Pensions revealed a record number of people had applied for universal credit benefits in the past fortnight as a result of the coronavirus pandemic.
It said 950,000 successful applications for the payment were made between 16 March, when people were advised to work from home, and the end of the month.
The department said it would normally expect around 100,000 claims in a two week period.
Meanwhile, thousands of people are calling on the government to close a loophole in its plans to help workers during the coronavirus outbreak.
Chancellor Rishi Sunak announced help for companies to pay staff – but only those on the payroll on 28 February.
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