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<p>The Coronavirus Job Retention Scheme was designed as a temporary, economy-wide
measure to support businesses while widespread restrictions were in place. Providing
support to the end of September strikes the right balance between continuing to support
the economy as it opens up and ensuring incentives are in place to get people back
to work as demand returns.</p><p> </p><p>This approach has worked; at the start of
this crisis, unemployment was expected to reach 12 per cent or more. It is now expected
to peak at about half of that level. That means almost 2 million fewer people out
of work than previously feared. The Bank of England’s Monetary Policy Report (MPR)
forecasts that the unemployment rate will on average be around 4.7% across Q3 and
Q4, a downwards revision from the May MPR which projected unemployment to peak at
5.4% in Q3 and below the OBR Spring forecast (6.5% in the final quarter of 2021).</p><p>
</p><p>Moreover, the labour market is recovering rapidly with reopening of the economy
in line with the roadmap. Flash HMRC PAYE data for July showed the number of paid
employees increased for the eighth consecutive month. The unemployment rate stood
at 4.7% in the 3 months to June 2021, down from a peak of 5.2% in the 3 months to
December 2020.</p><p> </p><p>Vacancies in the three months to July 2021 continued
to rise, reaching record levels and are now up 18% (rising by 142,000 to 953,000)
on the three months to February 2020.</p><p> </p><p>In order to support people into
work, as part of its comprehensive Plan for Jobs, the Government has announced the
£2 billion Kickstart scheme which will create hundreds of thousands of new, fully
subsidised jobs for young people, and the new three year Restart programme, which
will provide intensive and tailored support to over one million unemployed Universal
Credit claimants across England and Wales and help them find work.</p>
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