UK services firms report heavy job cuts as bleak autumn nears: CBI

FILE PHOTO: Pedestrians carry shopping bags, amid the coronavirus disease (COVID-19) outbreak, in London, Britain, July 18, 2020. REUTERS/Simon Dawson

August 26, 2020

LONDON (Reuters) – Britain’s services firms haemorrhaged jobs in the three months to August, a survey showed in the latest sign of mounting unemployment as the government’s coronavirus job protection scheme is wound down.

Companies reliant on spending by consumers – many of which only reopened in recent weeks after the lockdown – cut jobs at the fastest pace on record, according to a survey published on Thursday by the Confederation of British Industry.

Business and professional services firms reported the steepest declines since May 2009.

Companies expected job losses to slow slightly in the next three months but the CBI said government action was urgently needed.

“As we head into the autumn, the UK needs a bold plan to protect jobs as the job retention scheme draws to an end, to support the services sector,” CBI economist Ben Jones said.

Finance minister Rishi Sunak has rejected calls to extend his huge Coronavirus Job Retention Scheme beyond Oct. 31. Since the start of this month employers have had to pay a share of its costs.

Britain’s unemployment rate is expected to almost double to 7.5% by the end of 2020, according to the Bank of England, and many economists think it will go higher than that.

The CBI survey showed volumes of business dropped less severely than in the three months to May and companies expected the pace of decline to moderate further in the coming months.

Business and professional services firms were holding up better than companies in consumer services, but Jones said they faced additional uncertainty over Britain’s unresolved future trading relationship with the European Union.

Business and professional services reported a small uptick in sentiment, and confidence fell at a slower pace among consumer services firms after a record plunge in the three months to May.

But the outlook for investment intentions remained bleak. Business and professional firms expected to cut back on vehicles, plant and machinery, land and buildings and training over the next 12 although IT investment was expected to rise.

(Reporting by William Schomberg, editing by David Milliken)

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A second wave of coronavirus this autumn could be deadlier than the first, U.K. researchers warn

A potential new wave of coronavirus infections this winter poses a serious risk to the U.K. and could lead to as many as 120,000 hospital deaths from September to June, according to a report.

A second wave of Covid-19 could be more serious than the first as the National Health Service deals with a backlog of patients needing assessment and treatment and a potential outbreak of annual seasonal flu, researchers from from the country’s Academy of Medical Sciences said in the report.

The U.K. has already faced one of Europe’s worst outbreaks of SARS-CoV-2, with Prime Minister Boris Johnson falling seriously ill at one point. The country is one of many striving to ease restrictions on social contact while trying to revive failing economies and businesses.

Hospitals in the U.K. face an increased burden in winter when other respiratory diseases and common conditions such as heart disease tend to worsen. Covid-19 is also more likely to spread in cold weather as people spend more time indoors where the virus thrives, according to the report.

Flu Shots

Scientists and academics who wrote the report called for expansion of programs to test, track and trace those who have been exposed and are infected. Control measures and adequate stocks of personal protective equipment also need to be assured for hospitals and nursing homes, they said.

Flu vaccinations will also be important to prevent hospitals from becoming overwhelmed, the report said. Seasonal flu is regularly responsible in part for the NHS’s “winter crisis” when some hospitals fill up with sick patients.

The average number of people that one infected person transmits the coronavirus to, often called the reproduction rate or R-naught, could rise to 1.7 beginning in September, according to the report. That would lead to a peak of hospital admissions and deaths in January and February which could be worse than the first wave.

The current reproduction rate in the U.K. is about 0.7-0.9, which means the epidemic is diminishing overall. Ministers have previously warned the U.K. could go back into lockdown if the R rate rises above one.

The report is not a prediction but a “reasonable worst-case scenario,” and calls for intense preparation, the authors said.

More coronavirus coverage from Fortune:

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BOM data for autumn is in and Australia has come out looking warm

It might be hard to believe, considering how cold it has been in recent weeks, but autumn temperatures were actually slightly above average for Australia as a whole.

If you are in New South Wales, Victoria or Tasmania, though, you do have reason to moan — your mean temperatures were below average, although still only the 49th, 48th and 56th coldest on record since 1910.

NSW’s days were particularly cold at 0.88 degrees Celsius below average, the 16th coldest average maximum temperature on record for the state.

The only jurisdiction close to a warm record was Western Australia, which recorded its ninth warmest mean temperature for autumn.

A blue boathouse in the middle of a river with its jetty underwater.
Perth’s Insta-famous blue boathouse was inundated during a storm on May 25.(ABC News: Jessica Warriner)

Greg Browning, climatologist with the Bureau of Meteorology, said March and April were actually quite warm.

“April, in particular, was very warm across the country, but then we saw a significant drop-off come May,” he said.

“So that was a real dampener on those warmer temperatures and really was a bit of a sudden shift towards winter conditions.”

Map of Australia orange and yellow indicating above average in the north and west. Blue indicating below in inland NSW, VIC +SA.
Temperatures may have been above average overall, but it was chilly for parts of the south-east.(Supplied: BOM)

What is average?

The above-average temperatures are less of a surprise considering the BOM uses data from 1961 to 1990 to form the average for these comparisons.

This period is used as an international meteorological standard — a long dataset that formed a baseline to which people were accustomed, Mr Browning said.

Metal fence with hexagonal  holes filled with ice crystals.
Some places were still frosty during autumn, as evidenced by Lake Saint Clair in Tasmania.(Supplied: Maren Gorne)

While some applications had started using 1981 to 2010 as the comparison period, he added, it had not filtered down to public products at this stage.

“Certainly based on the recent global warming that we’ve seen on the land and over the oceans, you would expect it to be significantly warmer than what we saw back in the 1960s and even 1990s.”

Year so far and season to come

Australia is tracking for its 10th highest year to date for mean temperatures at 0.8 degrees above the 1961-to-1990 average.

Rainfall is pretty much bang on average according to Mr Browning, sitting at 1 per cent above average.

Raindrops on glass window.
There are still strong odds for a wetter-than-average winter.(ABC News: Chris Gillette)

“It’s been a while since Australia has seen a significant period of above-average rainfall,” he said.

“It certainly has been a big change in rainfall compared to recent years in particular.”

Not all locations have received rain and some areas are still facing serious deficits after years of drought, however things are looking up on the whole.

The optimism continues when you look at the outlook, which suggests most of the country has at least a good chance of average or wetter-than-average conditions over winter.

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