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UK economy could shrink by 35% with 2m job losses, warns OBR | Business

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Britain’s economy could shrink by 35% this spring and unemployment soar by more than 2 million due to the coronavirus crisis, the government’s independent economics forecaster has warned.

In a stark assessment of the economic fallout from Covid-19 as lockdown measures bring much of the country to a standstill, the Office for Budget Responsibility said that gross domestic product (GDP) could plunge by more than a third in the second quarter of the year and by 13% for 2020 as a whole.

Sounding the alarm that the immediate hit to living standards could be worse than the initial shock of the 2008 financial crisis, it said joblessness could hit 10% by the end of June and government borrowing this year would increase at the fastest pace since the second world war.

After a decade of steady job creation to drive unemployment to its lowest rate since the mid-1970s before the coronavirus hit, such an increase in people losing their jobs would return the country to levels last recorded in the early 1990s recession, when Britain crashed out of the European Exchange Rate Mechanism.

The Office for Budget Responsibility is the government’s independent forecaster, which gives its verdict on the outlook for growth and the public finances twice a year.

The forecasts are published to coincide with the chancellor’s two big set pieces of the year – the autumn budget and the spring statement – and takes into account the impact of any tax and spending measures announced in those statements.

The OBR also uses its public finances forecasts to judge the Treasury’s performance against the chancellor’s fiscal targets, stating whether or not it has a greater than 50% chance of hitting the targets under current policy.

It was established in 2010 by the then chancellor George Osborne with the aim of improving the credibility of the government’s official forecasts for growth. The forecasts were previously produced by the Treasury itself and often criticised for being unrealistic.

The OBR is led by three members of the budget responsibility committee, including chairman Robert Chote, a former director of the Institute for Fiscal Studies, with support from the OBR’s permanent staff of 27 civil servants.

The OBR analysis came as countries around the world try to devise exit strategies from lockdown conditions despite a rising global death toll.

With business activity and social life effectively brought to a coordinated standstill in most of the developed world, the International Monetary Fund also warned on Tuesday of an economic slump unparalleled since the Great Depression of the 1930s.

In its half-yearly forecasts, the IMF said the “Great Lockdown” could cause global GDP to contract by around 3% this year. The Washington-based fund had forecast growth of 3.3% this year as recently as three months ago.

Gita Gopinath, the IMF’s economic counsellor, said the size of the hit to the global economy, uncertainty about the how long the shock would last, and the need to discourage economic activity to contain the virus had to led to a crisis “like no other”.

The IMF, which forecast a 2020 drop in UK output of 6.5%, also predicted GDP falls of 9.1% and 8% respectively for Italy and Spain – the two worst-affected European economies from Covid-19 so far – and expects Chinese growth to fall from an expected 6.1% to just 1.2%, its lowest level in decades.

Gopinath warned the declines coud be far larger: “Much worse growth outcomes are possible and maybe even likely.”

The OBR’s gloomy outlook for the UK was published after the foreign secretary, Dominic Raab, warned the country could remain in lockdown for at least another month. The OBR said: “The longer the period of economic disruption lasts, the more likely it is that the economy’s future potential output will be scarred.”

In a grim assessment that depends heavily on how long ministers decide to keep the lockdown measures in place, the OBR scenario assumed that tight controls would be maintained for three months, followed by a further three months when they are only partially lifted.

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The watchdog said it was not attempting to predict what ministers would ultimately decide. Warning that there was a high degree of uncertainty, it said the hit to jobs and growth could be plausibly greater or smaller.

Offering a degree of optimism as the outlook worsens, the OBR said the economy could quickly snap back from the deepest crash in more than a century, with GDP recovering to its pre-virus levels as quickly as the end of this year.

Outlining the escalating risks to Britain from the economic collapse, the government’s forecasters also warned that public borrowing would almost quintuple this year as the government ramps up its emergency support package for struggling households and businesses.

uk recessions graphic

According to the tax and spending watchdog, borrowing could rise to around £273bn, or 14% of GDP.

This would rank as Britain’s biggest peacetime budget deficit, but the OBR said the damage to jobs and growth would have been far greater without the emergency spending package.

The budget deficit would be greater than the one inherited in 2010 by David Cameron’s coalition government following the financial crisis, which encouraged the former Tory prime minister to embark on a painful austerity drive in an attempt to balance the books. Despite a decade of deep cuts to public services, the deficit remained at almost £50bn in the last financial year.

Paul Johnson, director of the Institute for Fiscal Studies, said a complete reappraisal of economic policy would be required once the dust settled on the coronavirus crisis but predicted that a return to austerity was unlikely. “Tough decisions will have to be made which are likely to involve tax rises and higher debt for some time to come,” he said.

Warning that the prospect for jobs and growth could significantly worsen if lockdown measures are extended well into the summer, Johnson added: “We must not underestimate just how staggering these figures are, and by how much the economic outlook has shifted compared to just a few months ago.”

Underlining the tough choices facing ministers over how best to end the steps to curtail social and business activity, the OBR warned that each additional month of tight control would cost the exchequer as much as £45bn of additional borrowing.

As the economy crashes and public borrowing balloons, Britain’s national debt – the sum of every annual budget deficit – is expected to spiral to more than 100% of GDP this year.

Rishi Sunak, the chancellor, said it was clear the coronavirus pandemic would have a very significant impact on the UK economy, just as it would for other nations around the world.

“People should know that there is hardship ahead and we won’t be able to protect every job or every business,” he said at the government’s daily press briefing.

Saying that the OBR forecasts were only a potential scenario, he said the report had confirmed government actions had protected jobs. “If we hadn’t done these things it would mean that things were a lot worse.”

Against a background of mounting concerns over the government’s exit strategy, some observers warned against over-simplifying the argument between balancing economic prosperity with the health of the country.

The Resolution Foundation warned that ending the lockdown now could lead to more deaths in future, as well as the need for a reimposition of tougher lockdown measures that could cause greater economic damage.

Torsten Bell, the thinktank’s chief executive, said: “This should caution against those arguing that policymakers can avoid these costs by simply ending the current lockdown.

“Policymakers should also recognise that these forecasts represent just one scenario for a three-month lockdown. History shows that measures to control a pandemic can in fact last much longer.”

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WorkSafeBC disallows majority of COVID-19 job injury claims – Peace Arch News

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WorkSafeBC has accepted 430 compensation claims related to COVID-19 exposure so far this year, and disallowed 698 others, data from the provincial workplace insurance agency show.

Claim statistics show by far the largest number of coronavirus-related injury claims in B.C. have come from health care and social services workers, with 320 claims allowed and 321 disallowed as of Oct. 21. Another 154 claims from that group were pending and 86 have been suspended.

Accommodation, food and leisure services, including grocery store employees also deemed essential in the pandemic, have produced only 11 allowed claims and 17 disallowed. A single claim from an education worker has been allowed, and another 22 disallowed, with 12 more pending.

“Claims are allowed when there is sufficient evidence to establish that the worker has COVID-19 and the risk in the workplace was significantly higher than the ordinary exposure risk,” WorkSafeBC explains. “Claims are typically disallowed when there is insufficient evidence to establish that the worker has COVID-19 (based on tests or symptom cluster), and/or the worker went off work strictly as a preventive measure.”

Other categories reflect the workplace outbreaks that have been reported by B.C. public health officials since COVID-19 reporting began early in 2020. Agriculture workers have had 28 claims allowed and seven disallowed, while 18 claims have been allowed for workers in food and beverage manufacturing, including poultry processing plants that were briefly shut down due to employee exposure to the virus.

Notable for the lack of COVID-19 related claims are resource industries. WorkSafeBC reports a single claim for oil and gas or mineral resources, disallowed, and two claims for metal and non-metallic mineral manufacturing, both disallowed with three more pending. Wood and paper products manufacturing industries have had two claims disallowed.

Construction, which has carried on with infection precautions but not the shutdown seen in other provinces, has had one claim allowed and 13 disallowed.

“Not all claims registered receive an allow or disallow decision,” WorkSafeBC says. “Some claims are suspended and therefore do not proceed through the decision-making process. This happens after the claims are registered and is often a choice workers make not to proceed wit the requirements of the claims process.”


@tomfletcherbc
tfletcher@blackpress.ca

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Alaska university chancellor accepts new job in California

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ANCHORAGE, Alaska — The chancellor of the University of Alaska Anchorage has announced that she plans to take a new position as the president of a California university.

Chancellor Cathy Sandeen said Thursday she accepted an offer to become president of California State University, East Bay.

Sandeen was appointed to the top position at the University of Alaska Anchorage in 2018. The university said her last day will be Jan. 3.

She took over before a magnitude 7.1 earthquake damaged the Anchorage campus and as the University of Alaska system began to deal with a steeply declining budget leading to numerous program cuts.

The university recently announced plans to eliminate the hockey team and other sports unless it can raise enough money to cover operating expenses.

Sandeen will replace Leroy Morishita, the retiring president of California State University’s East Bay campus in the San Francisco Bay Area city of Hayward.

Sandeen said in an email Thursday to students and employees that she was leaving to be closer to family in California at “another public, open-access, urban-metropolitan university very similar to UAA.”

“We have accomplished much together and I am proud of how we withstood so many challenges — from earthquakes and financial exigency to program reviews and now a global pandemic,” Sandeen wrote. “UAA is a stronger and more stable university based on the ingenuity and collaboration of all members of our community.”

An interim chancellor will be appointed in the next few weeks by Pat Pitney, interim president of the University of Alaska system.

Sandeen’s decision to leave marks the third high-level departure from Alaska’s university system this year.

Jim Johnsen resigned as system president in June following criticism resulting from interviews for a post in Wisconsin.

Rick Caulfield, the head of the University of Alaska Southeast, retired this summer.

The Associated Press



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SSC JE application process ends today; check syllabus, paper pattern

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By: Careers Desk | New Delhi |

October 30, 2020 12:47:29 pm


SSC JE 2020SSC JE application process closes today at ssc.nic.in. Representational image/ file

SSC JE recruitment 2020: The application process for the Staff Selection Commission (SSC) junior engineer (JE) recruitment exam will be closed today. Interested, eligible candidates can apply at ssc.nic.in. Candidates can make payment online till November 1 and send offline challan till November 3.

The candidates will be selected on the basis of a computer-based test that will be held from March 22 to 25. Those who clear the CBT will be called for paper II dates of which are not released yet.

Read | UPSC CDS-I notification 2020: Application process begins; check exam pattern, how to apply

SSC JE 2020: Eligibility

Education: Applicant must be a person of Indian nationality and have a degree in a relevant stream of engineering. Candidates having a three-year diploma with two years of work experience can also apply.

Age: The upper age is capped at 30 years for most jobs barring positions at Central Public Works Department (CPWD) and Central Water Commission, for which the upper age limit is 32 years. Applicants belonging to a reserved category will get relaxation in the upper age limit as per the rules of the government.

SSC JE 2020: Exam pattern

The paper-I will consist of objective type, multiple-choice questions only. The questions will be set both in English and Hindi. There will be a negative marking of 0.25 marks for each wrong answer in paper-I. The paper-II will have to be written either in Hindi or in English. The candidate will have to opt for one language, if the part paper is written in Hindi and part in English, it will be awarded zero marks, as per rules.

Read | NSDC, Microsoft to train 1 lakh underserved Indian women in digital skills

Based on the performance in paper-I and paper-II, candidates will be shortlisted for document verification. The final selection and allocation of ministries or departments or organisations will be made on the basis of the performance of candidates in both the tests combined.

The finally selected candidates will get a salary in the range of Rs 35,400 to Rs 1,12,400.

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