British households will have £43bn less to spend on essentials in second quarter of this year as coronavirus pandemic squeezes family finances
British households will have £43 billion less to spend on essentials in the second quarter of this year as the coronavirus pandemic squeezes family finances.
The average household is expected to have £515 less – or 17 per cent – between April and June, the Centre for Economics and Business Research (CEBR) predicts.
This is partly due to a rise in unemployment, with 950,000 people applying for universal credit between March 16 and 31 – nearly ten times more than in a typical fortnight.
Counting the costs: The average household is expected to have £515 less between April and June
The Office for Budget Responsibility expects 2.1m will lose their jobs in the second quarter, mainly the lower paid.
Most workers furloughed under the Government’s coronavirus jobs retention scheme will see pay cut by 20 per cent, as the Treasury only meets 80 per cent of their wages.
Self-employed people unable to work will get 80 per cent of their monthly trading profits up to £2,500, and only if they fit stringent criteria for how long they have operated.
The CEBR wants the Government to cut VAT temporarily to kick-start spending after lockdown.