1st October 2021
Good morning If you’ve been having issues with your TV channels this past week then you’re not alone. A fire alarm at a broadcast centre last Saturday has led stations including Channel 4, Channel 5, BBC and ITV to go off air for some viewers. Last night the issue left fans of E4’s ‘Married at First Sight’ disappointed after the channel broadcast Wednesday’s episode instead of the series finale.
End of an era – furlough is no more
Raising the ceiling – US faces debt limit crunch
ECONOMYFurlough is no more
What’s going on?After 18 months the government’s Coronavirus Job Retention Scheme aka furlough came to an end yesterday.
Why is this important?
Costing £68bn in total, furlough has helped pay the wages of nearly 12m British workers since March 2020. It was the single most expensive part of the government’s pandemic response.It was introduced after Covid-19 forced large parts of the economy to close. It saw the government pay towards the wages of people who could not work, or whose employers could no longer afford to pay them, up to a monthly limit of £2,500.At first it paid 80% of their usual wage, but in August and September it paid 60%, with employers paying 20%.The scheme succeeded in keeping unemployment numbers down but the question is – what happens to the 1m people who were still on furlough when it ended. Unions and business groups have criticised the government for ended furlough at a time when households face rising energy bills along with a cut in universal credit. Business leaders warned of an “autumn storm” from the government dismantling emergency pandemic support schemes at a time when the economic recovery from Covid-19 was faltering.TakeawayThe economy is in a strange state where in some parts firms are warning of staff shortages (e.g. HGV drivers) while at the same time nearly a million people have rolled off furlough. The government is hoping that the record vacancy levels will absorb the million people who were still on furlough. However recruitment experts say that's unlikely due to the mismatch of skills between vacancies and those looking for jobs.
USUS faces debt limit crunch
The clock is ticking for the US government to avoid running out of money.Treasury Secretary Janet Yellen warned that Congress needs to raise the government's debt ceiling by October 18th or it may have to default on its loans, which would be a catastrophic first for the country.The US debt ceiling is a legislative limit on the amount of debt that the government can take on, this currently stands at $28.4 trillion.Separately, Congress passed a funding bill last night to avoid a government shutdown.It would have meant hundreds of thousands of government workers being furloughed. It would have also impacted important work at government agencies like the US Centers for Disease Control - in the middle of a pandemic. Government shutdowns are nothing new – there have been 14 since 1981, lasting from just a day to over a month. They happen when politicians in Washington fail to agree a budget.Even though a shutdown was avoided the debt ceiling issue still looms. If Republicans and Democrats can’t agree to raise the debt ceiling, eventually the US government would be forced to default on its loans. If that happens, Janet Yellen has said there will be “a historic financial crisis”. An economic recession would be likely with higher interest rates and millions of jobs on the line. There’s a lot at stake - the US economy is still recovering from the pandemic, it seems likely that politicians would want to jeopardise this. It may be that at the 11th hour a deal is eventually reached to avoid default.
Stat of the day
The global drug trade is estimated to be worth over $460bn. The UK even includes it as part of the GDP calculations
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