Fewest Furloughed – business news 30 July 2021

James Salmon, Operations Director

Fewest furloughed staff since pandemic began. Mortgage borrowing hits record high. Deposits up £9.8bn in June. TUC hits out over umbrella companies and agency workers. Bumble to give staff unlimited paid leave and more.

Fewest furloughed staff since pandemic began
The number of people on furlough has fallen sharply, with HMRC data showing that 1.9m people were still on the scheme at the end of June, meaning 590,000 people were removed from the Government scheme over the month. This is lowest level since the start of the pandemic and half a million fewer than in May. The Treasury said younger people have come off furlough twice as fast as other workers in the last three months, with almost 600,000 under-25s leaving the scheme in the quarter. Chancellor Rishi Sunak said: “It’s fantastic to see businesses across the UK open, employees returning to work and the numbers of furloughed jobs falling to their lowest levels since the scheme began”. At the initiative’s peak in May 2020, almost 9m people were on furlough and since its launch, the Coronavirus Job Retention Scheme has supported 11.6m jobs in total. Since the start of July, employers have been asked to contribute 10% towards the wages of furloughed workers, with this to rise to 20% in August and September. TUC general secretary Frances O’Grady has concerns over the employer contribution doubling, saying it is “too much too soon” and will put jobs at risk in some parts of the economy.

Mortgage borrowing hits record high
Mortgage borrowing hit a record monthly high in June, Bank of England (BoE) data shows, climbing to £17.9bn. This marks a 163% jump on the £6.8bn recorded in May. The increase came as buyers looked to complete deals before the stamp duty holiday started to taper. While the threshold at which tax on property sales applies was lifted to £500,000 from £125,000 amid the pandemic, as of June 30 it was reduced to £250,000. Chris Sykes, a mortgage consultant at Private Finance, said: “Almost everyone purchasing in the first 6 months of this year were aiming to complete by the stamp duty holiday tier end.” The BoE report also showed that mortgage approvals reduced over the last month, falling 6% to 81,300, having totalled 86,950 in May. Martin Beck, senior economic adviser to the EY Item Club, said this was likely to have been driven by “the notion that most buyers would have struggled to complete in time if their mortgage was not approved until June”.

Deposits up £9.8bn in June
Figures from the Bank of England show that households increased deposits with banks and building societies by £9.8bn in June, with this outdoing the £7.3bn increase recorded in May. While June’s deposits were down from the £14.7bn average seen in the six months to May, the total was still far above pre-pandemic levels. It was also shown that consumers repaid £100m in credit card debt. Households borrowed £300m using consumer credit in June. Among UK businesses, large non-financial firms borrowed the highest amount for seven months in June, at £800m, while small businesses repaid £300m of loans on a net basis. Reflecting on the Bank’s report, Martin Beck, senior economic advisor to the EY Item Club, said: “With households’ saving deposits remaining above pre-pandemic levels, consumers are clearly some way from returning to normal spending patterns”, but added that the lifting of restrictions on July 19 “should provide a spur to lending activity”, especially if a decline in coronavirus cases continues.

TUC hits out over umbrella companies and agency workers
The Trades Union Congress (TUC) has urged ministers to ban the use of umbrella companies to employ agency workers, with concern over some such entities being linked to abuse of workers and fraud. TUC general secretary Frances O’Grady said: “These scandalous workplace practices have no place in modern Britain. But our inadequate regulations let dodgy umbrella companies off the hook – allowing them to act with impunity.” She added that employers “shouldn’t be able to wash their hands of any responsibility by farming out their duties to a long line of intermediaries”. Research from the Low Incomes Tax Reform Group suggests that as many as half of all agency workers are employed through umbrella companies – firms that sit between workers and recruitment agencies, supplying staff to the companies who need labour.

Bumble to give staff unlimited paid leave
Dating app Bumble has said its 700 employees can take unlimited paid leave, with it believed that staff will still be expected to complete their work. The firm, which temporarily closed its offices in June to combat workplace stress, said the pandemic had made it “reflect on” the ways staff worked and prompted a new policy. BBC News notes that the coronavirus crisis has seen a number of firms reflect on working practices, with PwC telling staff they will be able to work from home a couple of days a week and start as early or late as they want

US Economy

The US Economy is bouncing back sharply from the damage inflicted on it by the pandemic, but output growth is decelerating well below analysts’ expectations. The Commerce Department estimated the US economy grew at an annualized rate of 6.5 per cent in the second quarter of this year, driven by the rapid vaccine rollout and enormous government stimulus measures triggering a burst in consumer spending.

Study reveals European income tax gap
Analysis shows that there is disparity across European countries when it comes to income tax, with a study from salary calculator Income Tax UK looking at how much someone earning £2,580 per month would be taxed across the UK and 33 European countries. Bulgaria came out on top, with £2,313 in take-home pay. Poland followed, at £2,226, while Ireland’s £2,120 put in third place. The UK was found to take the eighth lowest tax, leaving Britons earning £2,580 per month with £2,058 after tax. Lithuania took the most tax, pulling in £1,073.28 from a £2,580 monthly wage, while Romania, Portugal and Slovenia all took close to £1,000 from taxpayers. An Income Tax UK spokesperson said: “It’s very interesting to see the tax differences across Europe for an average monthly salary.” “As we shift to a more remote working culture, those with the ability to work from anywhere also have the opportunity to maximise their income”, they added.

Prison time over tax evasion trebles
HMRC’s elite Offshore, Corporate and Wealthy (OCW) Unit secured convictions totalling 67 years of prison time for tax evaders last year, far exceeding the 23 years secured a year earlier. Analysis by law firm Pinsent Masons suggests that HMRC’s strategy of using targeted criminal investigations, rather than just civil penalties, is paying off. Andrew Sackey, partner at Pinsent Masons, said: “HMRC is proving that wealthy tax evaders who engage in deliberate dishonesty at the expense of the tax man don’t just get fines – they go to prison … The perception that wealthy people who evade tax only get financial penalties is increasingly untrue.” A previous study by the law firm found that the average prison sentence for tax evasion last year rose to 2 years 11 months, up from 2 years and 1 month in 2015/16. The OCW Unit was established in the wake of the Panama Papers scandal in 2016 and investigates serious non-compliance by businesses and the wealthiest taxpayers. The threshold for wealthy individuals to be investigated by HMRC’s specialist OCW Unit means anyone with an income of over £200,000 per year falls within its jurisdiction.

BoE to end euro liquidity facility
The Bank of England is to end a facility allowing British-based financial institutions to access funds in euros, saying improved market conditions have removed the need for the Liquidity Facility in Euros (LiFE) programme. The facility was started in March 2019 amid concerns over a disorderly Brexit. Its last scheduled operation will take place on September 29 and the facility will close on October 1. The Bank said: “The Bank of England, in co-ordination with the European Central Bank, stands ready to re-adjust the provision of euro liquidity, including restarting LiFE, as warranted by market conditions”.


Amazon.com dropped as much as 5.2% in post-market trading after forecasting third quarter net sales of $106 billion to $112 billion, missing the average estimate of $118.7 billion. Amazon rounded off Big Tech’s earning season by announcing revenue of $113bn during the three months to June, up 27% on the same period last year. It is the third consecutive quarter that figure has topped $100bn. Nonetheless the company’s share price dipped. Investors had hoped for even better—and worry that an increasingly unlocked-down world will be less reliant on its deliveries.


NatWest Group has reported operating profits before tax of £2.5 billion, compared to an operating loss before tax of £770 million during the same period last year, in its half year results for 2020. After tax, profits were at £1.8 billion for the half year to 30 June 2021. Income across its UK and Royal Bank of Scotland International retail and commercial businesses dipped 3.3%, and was down at £160 million for the period.


Rightmove reported revenue up at £149.9 million, compared to £94.8 million for the same period in 2020, marking a 58% spike. Operating profit was up at £114.9 million, compared to £61.7 million the year before, an 86% increase on the year.

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