Global Macro Service > Research Briefings > United Kingdom

Chancellor’s new scheme offers limited hope for jobs

The wage subsidy scheme announced today by the Chancellor should mitigate what looks like an inevitable and sharp rise in unemployment and help offset the job-damaging effects of new Covid restrictions. However, even allowing for the tax advantages to firms of employing part-time versus full-time workers, the impact of the incentive to maintain headcounts offered by the scheme is likely to be limited. Meanwhile, this year’s autumn Budget is set to be postponed, which would be a sensible move given the current uncertainty. It will also remove the headwind to the recovery from recent speculation of a looming “tax bombshell”.

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