Making sure that my pension portfolio will hold good for 2021.
Looking at your question of will there be more job losses after furlough ends in April?
Firstly, unemployment levels have been rising throughout the pandemic and as of November the unemployment rate stood at 4.8%, a rise of 0.7% over the previous quarter. This seems to suggest that struggling companies are being allowed to go to the wall even with the government support in place. To those that have not lost their jobs this is good news as zombie companies are not being kept alive artificially and the pain of mass unemployment when the support is pulled is reduced.
We also do not know when the furlough scheme will end as it has already been extended from its previous October deadline and will likely be extended again if the government has to put in place further movement and trading restrictions as we approach the next deadline of the end of April.
With vaccines being rolled out at unprecedented speeds it is hoped that we will be back to a more normal life by the end of the second quarter, assuming we follow the trajectory of countries such as China that were able to deal far more successfully with the virus than ourselves. This would imply that employment rates would in fact rise, which in turn, could lead to inflation (unlikely for a couple of years).
As we have all come to understand throughout this pandemic, our leaders are having to be flexible in their approach regularly moving the goal posts making forecasting an even greater difficulty. However, given the course they have sailed to date I believe it unlikely that a huge wave of job losses will be allowed over a short period of time.
It’s all about STIMULUS.
