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But they also warned that the Chancellor will need “a roadmap for how the Government plans to deal with the debt.” The warning came after the committee last night heard predictions from leading economists at the International Monetary Fund and Organisation for Economic Cooperation and Development that low-income, low-skilled workers will be hardest hit by the slowdown in UK growth. It comes ahead of Mr Sunak announcing more measures to support the economy through the easing of lockdown next week.
And concerns about the economic downturn intensified yesterday as the John Lewis retail giant warned of store closures and fashion chain Topshop threatened redundancies.
Tory MP Mel Stride, the chairman of the Treasury Committee, said: “With the Chancellor set to provide an economic update next week, the IMF’s chief economist has made it clear that now is not the time to start dealing with the public debt, but that it could be the time for planning a longer-term strategy.
“With the IMF and OECD telling us that those most impacted by the crisis are often low-skilled, low-income workers, who often tend to be women and minorities, it’s essential that the Government gets this right.
“When he provides his update next week, the Chancellor should, at a minimum, provide a roadmap for how the Government plans to deal with the debt.”
During yesterday’s committee hearing, IMF chief economist Gita Gopinath told the MPs: “The first half of this year was the deepest contraction we have seen.
“Because economies are reopening we are seeing signs of recovery.
“We can see the worst is behind us, maybe, in many economies but that is not guaranteed.”
She forecast and “initial spurt” of growth followed by a more “gradual” recovery later this year.
“This is going to be a somewhat prolonged recovery with many countries below their pre-crisis levels even at the end of 2021.”
The IMF had recently forecast that the UK economy will shrink by 10% this year but grow by around 6 percent next year.
“Because we don’t have a health solution at this point we expect there will be more persistent social distancing in the second half of this year and the scarring that comes with that,” she said.
Laurence Boone, the chief economist at the OECD, told the committee: “The UK is among the OECD countries together with France, Spain and Italy being particularly hurt in part because of the strict confinements and because of the importance of services in the UK.”
Concerns about job cuts across the UK intensified yesterday following announcements from the John Lewis Partnership warned over store closures and tycoon Sir Philip Green’s Topshop empire.
In a letter to staff, John Lewis’s new chairman Sharon White confirmed plans to shut several shops, axe one of its two offices in Victoria and cut roles.
Sir Philip’s Arcadia group said it was cutting around 500 of its 2,500 head office jobs amid a restructure in the face of the coronavirus crisis.
And luxury department store Harrods is also reportedly slashing around 700 posts as the pandemic and lockdown wreaks havoc on Britain’s high street.
Earlier on Tuesday, Upper Crust owner SSP announced up to 5,000 roles could go following plunging passengers numbers at railway stations and airports.
John Lewis said: “The reality is that we have too much store space for the way people want to shop now and we have shared this with our partners.
“As difficult as it is, it is highly unlikely we will reopen all our John Lewis stores.
“However no decision has been made and any details would be shared with partners first by the middle of July.”
Insiders have been warning recently it was unlikely all 50 of its stores would ever reopen again after lockdown.
It unveiled plans separately on Wednesday to reopen another 10 stores, including its flagship Oxford street site, bringing the total to 32 so far, though 18 remain closed.
But in a further blow to staff, the group, which also owns Waitrose, cautioned staff that their annual bonus was also likely to be scrapped next year amid a drive to boost profits.
The grim day for retail also saw Arcadia blame “very challenging times” as it revealed plans to trim its head office operations.
The group, which also owns Burton and other high street brands, said: “Due to the impact of COVID-19 on our business including the closure for over three months of all our stores and head offices, we have today informed staff of the need to restructure our head offices.”
“This restructuring is essential to ensure that we operate as efficiently as possible during these very challenging times.”
It is understood Harrods boss Michael Ward told staff in a memo that the group was expecting to cut 14 percent of its 4,800 staff.
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