Furlough numbers climb sharply in January to 4.7 million

The number of people on furlough rose by 700,000 in January after tighter lockdown restrictions were imposed.

Treasury figures show a total of 4.7 million people were on the government scheme at the end of the month.

The hospitality sector, one of the hardest hit by the coronavirus crisis, furloughed 1.15 million people in January - an increase of 3%.

But the middle of February a total of £53.8bn had been claimed since the furlough scheme began last year.

The furlough data means that 16% of eligible workers were on the support scheme at the end of January.

In total, 11.2 million employees across the UK have been given furlough cash. The scheme pays up to 80% of salaries to those who cannot work because of Covid-19 restrictions.

Charlie McCurdy, researcher at the Resolution Foundation, said: "Furlough has once again played a crucial role in protecting incomes and keeping a lid on rising unemployment.

"But with almost five million workers still on furlough in the most recent data, our biggest labour market challenges may be ahead of, rather than behind, us."

Separately, businesses took out a further £2.2bn of government-backed loans in the last month, according to Treasury figures.

The coronavirus business interruption loan scheme (CBILS) was most popular, with a further £1.2bn of loans awarded.

In total, nearly £73bn has been lent under the scheme and its two sister schemes - the coronavirus large business interruption loan scheme and the bounce back loan scheme.

The furlough figures show that while 1.5 million workers using the scheme are employed by big companies, it is staff at small firms with between two and four employees who are most likely to be furloughed.

These companies filed claims for more than 620,000 staff, or 36% of those eligible to be furloughed. Among larger businesses with more than 250 employees, only 9% of eligible staff were furloughed - the lowest proportion.

On average, women are more likely than men to be furloughed, however in London and Northern Ireland the furlough rate among eligible male employees is higher than among women.

The furlough statistics are vital to assess what is happening with the economy, and for how much longer the government's rescue support will be required.

The answers from today's statistics show that just under five million workers were on furlough in January during the second wave national lockdown.

It is though less than the nine million during the first national lockdown, giving some clues as to how the economy has been able to adapt better to these conditions.

By sector, retail and hospitality saw the biggest rises on the end of last year. About 68% of workers in the restaurant sector are currently furloughed. Retail furloughs were 938,500 at end of January, well up on December, but about half the level of the peak last April.

On the other hand, manufacturing and construction seems to have largely continued, and numbers furloughed are well down on the first wave.

The Centre for Cities dug into the numbers by location. The top 10 areas for furlough include those most exposed to tourism and aviation - Crawley, Blackpool, Brighton, Slough, all seeing over 1-in-6 workers on furlough. Those least reliant on the scheme include Barnsley, Doncaster and Hull at around 1-in-9 workers.

More women than men have been furloughed, reflecting the sectors most hit by pandemic lockdowns. By age group it is 25-34-year olds most hit, with over one million again now furloughed.

All of this underpins why rescue support will be extended at the Budget next week. But it also suggests that the real problems are concentrated by sector and by age.