The end of the coronavirus job retention scheme, known as furlough in the UK, marks a significant shift in the pace of the economic progress with the gap in the pandemic related uncertainty being successfully bridged. The transition into a new era of work is reflected in indicators of a rebalancing of the economy towards new demand drivers, as well as adaptive office related trends to capitalise on commercial space in the UK property market.
Pre-pandemic the prioritisation of good transport links, high worker density, and in-person attendance was high. However, post-pandemic there is greater value ascribed to health and wellness, ESG and flexibility. Occupiers, tenants, and landlords are recalibrating conceptions of quality to match with these new and emergent standards, according to UK office occupier trends, discussed in the latest Savills report.
London has maintained its stature as a leading global hub for talent, innovation, technology and finance. Lloyds Bank's latest annual sentiment survey of over 100 financial firms, banks, asset managers and insurers revealed that over two thirds believe the capital will remain a top global centre.
Government data shows there were over 1 million job vacancies in the U.K. in the three months through August. This is over twice the number of job openings available a year ago and the highest on record. Of those who participated in the furlough scheme, it is estimated that 70 per cent will resume work with their old employer; with 80 per cent of that work being full time.
For others, the process of matching available jobs will require a period of stabilisation. Displacement of wholesale and retail jobs will enable human capital flow to areas of high demand, shoring up employment shortages in sectors such as healthcare, food, construction and transportation. As such economists expect the UK unemployment rate to peak at 5.3 per cent in the fourth quarter before receding in early 2022.
Samuel Tombs, chief U.K. economist at Pantheon Macroeconomics, a consulting firm, estimates that around 70% of those still in the program will resume work with their old employer once it comes to an end. Around 80% of those will likely return full-time to work but 20% will return on fewer hours than they would like.