London Daily

Focus on the big picture.
Thursday, Oct 22, 2026

No guarantee of quick economic bounceback, warns Sunak

It is "not obvious there will be an immediate bounceback" for the UK economy, once lockdown restrictions are eased, the chancellor has warned.

Rishi Sunak said he hoped for a swift recovery, but it could take time for the UK economy to get back to normal.

"It takes time for people to get back to the habits that they had, there are still restrictions in place," he said.

His warning came as figures showed the number of people claiming unemployment benefit soared to 2.1 million in April.

The jump of 856,500 claims in April reflected the impact of the first full month of lockdown, the Office for National Statistics (ONS) said.

The government has made some changes to who can claim work-related benefits during the pandemic, but this figure is one of a series that show the stress Covid-19 is putting on the jobs market.


'Jury's out'

Speaking to the Lords Economic Affairs Committee, Mr Sunak said figures from around the world where countries were progressively easing and lifting restrictions, suggested a full recovery could take time.

He said the "question that occupies" his mind was "what degree of long-term scarring is there on the economy" and that once restrictions begin to be lifted there will be the case of "what do we return to" and on that the "jury's out".

But he admitted he felt "all economic forecasters and economists would agree the longer the recession is, it is likely the degree of that scarring will be greater".

He said that even if the government can reopen retail in England as planned on the 1 June, there will still be restrictions on how people can shop.

This will have an impact on how much they spend, and on how many people go out, Mr Sunak said.

"I think in all cases it will take a little bit of time for things to get back to normal, even once we've reopened currently closed sectors," Mr Sunak added.

When quizzed on unemployment by the committee, Mr Sunak said he did not have a precise estimate for what the numbers would be at the end of the year.

However, he said: "Obviously, the impact [of the coronavirus pandemic] will be severe."

Before the lockdown began, employment had hit a record high.

In another indication of the bleak employment landscape, the number of job vacancies fell by nearly a quarter to 637,000 in the three months to April.


'The week after I left the company, Covid hit'

Meanwhile, claims for universal credit - the benefit for working-age people in the UK - hit a record monthly level in the early weeks of lockdown.

Unemployed HR worker Jon Ellis-Fleming, of Keighley in West Yorkshire, had been with an outsourcing company for more than four years when he was made redundant.

He left the firm on 8 March, hoping to spend some time at home with his partner Julia Paterson and their eight-month-old daughter Daisy while looking for a new job.

"The week after I officially left the company, Covid hit," he told the BBC. That meant that several promising job offers just evaporated as firms put their recruitment plans on hold.

Jon applied for universal credit and jobseeker's allowance. He is due to receive his first payment of £600 later this month, while his partner receives £650 a month on maternity leave.

That leaves them with less than half of their former income - and with another mouth to feed as well.

"I've not been out of work in 10 years," he said. "I've never had any intention of being out of work that long.

"I can't help but wonder, if I'd been with the company two weeks longer, would furloughing have been an option?"

The unemployment rate was estimated at 3.9%, slightly down on the previous quarter, the ONS said.

The jobless figures only cover the first week of the lockdown and they are expected to worsen sharply in the coming months.

Jagjit Chadha, director of the National Institute of Economic and Social Research, told the BBC: "We can reasonably expect unemployment to rise very quickly to something over 10% - something we haven't seen since the early 1990s."

Estimates based on returns for individual weeks suggest that the fall in the unemployment rate was mostly caused by the decrease in hours in the last week of March, with a much smaller decrease in the previous week, the ONS said.

In the final week of March, the total number of hours worked was about 25% fewer than in other weeks within the quarter.

Newsletter

Related Articles

0:00
0:00
Close
Parliamentary Inquiry Highlights Urgent Need to Address Housing Shortage as Scottish Completions Hit Eleven-Year Low
United Kingdom and Singapore Sign Comprehensive Financial Agreement to Deepen Digital and Sustainable Market Ties
Greggs Announces Plan to Close Four Manufacturing Facilities and Cut Seven Hundred and Forty Jobs
International Monetary Fund Raises United Kingdom Economic Growth Forecast While Warning of Inflationary Pressures
Energy Security and Net Zero Committee Urges Government to Shift Policy Costs Onto Gas to Lower Household Bills
Housebuilding Across Scotland Plummets to Eleven-Year Low Despite Government Pledges to Tackle National Housing Emergency
Greggs Announces Factory Closures Across Northern England and Scotland Affecting Seven Hundred Forty Jobs
United Kingdom and Singapore Conclude Eleventh Financial Dialogue in Singapore to Deepen Cooperation on Digital Finance and Capital Markets
Energy Security and Net Zero Committee Urges Government to Shift Policy Costs to Gas Bills and Tap Windfall Profits to Lower Consumer Prices
British Broadcasting Corporation Announces Major Cost-Cutting Overhaul to Close Linear Broadcast Services for Television Channels BBC Three and BBC Scotland Alongside Digital Radio Station BBC Radio Four Extra
London Capital Markets Face Renewed Scrutiny After High-Profile Offerings Underperform Post-Listing
Green Party Wins Historic First Westminster Parliamentary By-Election in Gorton and Denton
Environment Secretary Emma Reynolds Unveils Sweeping Regulatory Overhaul for English Water Industry
United Kingdom Health Security Agency Confirms Thirty-Four Cases in Kent Meningitis Outbreak
Ministry of Defence Prepares Heat Pump Subsidy Cuts to Fund Urgent Military Modernization
British and European Union Officials Schedule Long-Awaited Bilateral Leaders Summit for November Twentieth
Bank of England Governor Andrew Bailey Urges Strict Fiscal Credibility to Protect British Bond Markets
United Kingdom Inflation Rises to Three Point One Percent Driven by Escalating Fuel Costs
Profit Warnings Among London-Listed Companies Reach Two-Year High Amid Global Energy Shocks
Chancellor John Healey Signals Targeted Tax Changes on Banks and London Corporate Offices Ahead of Budget
British Government Reallocates Twenty-Five Per Cent of International Climate Finance to Global Biodiversity Projects
Initial British Carbon Border Taxes Set to Undercut Parallel European Union Tariffs on Industrial Imports
Whitehall Prepares National Zero-Interest Loan Initiative to Accelerate Domestic Heat Pump and Solar Adoption
European Union Offers British Automakers Access to Hybrid Vehicle Trade Protections Subject to Strict Regulatory Alignment
British Probation Officers Threaten Widespread Industrial Action After Rejecting Five Per Cent Government Pay Offer
Microsoft Abandons Major British Artificial Intelligence Data Centre Citing Severe National Grid Power Constraints
United Kingdom Inflation Accelerates to Three Point Four Per Cent Ahead of Chancellor John Healey's Inaugural Autumn Budget
Surging Cloned Number Plates Severely Complicate Traffic Enforcement and Police Investigations
Mounting Opposition Challenges Planned Rollout of Autonomous Taxis Across London
Influential Think Tank Urges Rejoining European Union to Navigate Geopolitical Crises
Government Review Recommends Slashing Benefits to Fund Youth Employment Initiatives
Senior Minister Shabana Mahmood Seeks New Law Enforcement Pact With European Union
Airbus Executive Warns Britain Risks Losing Crucial Role in European Space Industry
Exorbitant Electricity Costs Push British Steelmakers to Worst Competitive Position in Three Years
British Food and Beverage Exports to European Union Collapse by Over a Third Since Brexit
Up to Twenty English Maternity Units Face Impending Closure Due to Safety and Staffing Crises
Government Declares Severe Drought Across Southern England Following Record Dry Spell
Corporate Profit Warnings Reach Two-Year High Amid Middle East Conflict and Rising Costs
International Monetary Fund Warns Chancellor John Healey Against Proposed Bank Tax Raid
Northern Ireland Secures Favorable Agricultural Export Agreement with European Union
Scottish Government Approves Major Offshore Floating Wind Farm Near Aberdeenshire
High Speed Two Rail Project Faces Three Billion Pound Cost Escalation on Initial Phase
National Health Service Warns of Winter Capacity Crisis Across English Hospitals
Tata Steel Confirms Two Thousand Job Cuts at Port Talbot to Fund Green Transition
Global Microchip Developer Announces Three Billion Pound Semiconductor Plant in Cambridge
United Kingdom Artificial Intelligence Safety Institute Proposes Mandatory Licensing for Generative Models
United Kingdom Commits Additional Long-Range Weapons and Air Defenses to Ukraine
British Chancellor Overhauls Infrastructure Financing to Bypass Borrowing Constraints
Bank of England Holds Benchmark Interest Rate at Four Point Five Percent
First Minister Rhun ap Iorwerth Confirms Constitutional Discussions Over Welsh Independence During Initial Bilateral Call with Prime Minister
×