Nearly one in seven people in the UK might be unemployed by the end of this year if a second wave of the pandemic washes over the country, according to new estimates.
The Organisation for Economic Co-operation and Development (OECD) said the UK’s unemployment rate could reach 14.8% as its experts warned that global job losses could take unemployment rates to levels more comparable to the 1930s than 2008.
But even without a second wave of infections, the UK unemployment rate is likely to reach a record high of up to 11.7% by the end of this year, the OECD reported.
Next year it would fall to 7.2% if there is no second wave, but nevertheless a massive rise from the end of 2019, when the unemployment rate was 3.8%.
“The war has to be won and it has to be won fast,” said OECD secretary-general Angel Gurria, adding that the economic disaster has been magnified by the inability to fight the virus.
“We don’t have vaccine and we don’t have a medicine, we’re impotent … we’re closing down the cities like they used to do in medieval times, because it’s the only thing we know that works.”
I think we are talking about an impact on the labour market, which is unfortunately closer to the Great Depression more than the financial crisis – the impact is massive
It came amid dire economic warnings from his colleagues.
OECD director of employment, labour and social affairs Stefano Scarpetta said: “Only in a matter of three to four months, in terms of unemployment, we have gone back to where we peaked after the 2008 financial crisis.
“I think we are talking about an impact on the labour market, which is unfortunately closer to the Great Depression more than the financial crisis – the impact is massive.”
Last month the OECD warned that the British economy would face a major hit from the Covid-19 pandemic.
It expects GDP to drop 11.5% in 2020, and up to 14% if there is a second wave later in the year.
Mr Gurria said: “These numbers do not convey the massive hardship that is implied by an increase in unemployment of this scale. They mean large jumps in poverty, personal bankruptcies, depression, homelessness, crime. That’s why policy responses must be timely, they must be ambitious, and they must be sustained.”
“The young are once again at risk of becoming the biggest losers of the crisis,” he added.