MINISTERS must act now to save jobs, the Trade Union Congress (TUC) urged today after the Bank of England (BoE) predicted unemployment levels rising to 2.5 million.

The central bank has forecast a 7.5 per cent increase in people looking for jobs at the end of 2020, which it says will then decline from the start of next year.

This would represent 2.5m people, the highest figure since 2013, BoE said.

TUC general secretary Frances O’Grady said: “The threat of mass unemployment has not gone away. Ministers must act now to save jobs. 

“That means extending the job retention scheme for businesses in hard-hit sectors like retail, manufacturing, and aviation. 

“Many companies have a viable future but need longer-term support to get back on their feet. 

“And the government must invest now to create the jobs we need for the future in green industries, social care and across the public sector.”

Ms O’Grady said the more people that can be kept and placed in work, the faster the economy will recover. 

Labour’s shadow chancellor Anneliese Dodds said the government has “still not got a grip” on the health crisis, and warned that Britain could not recover from the economic crisis until it does. 

"And [Chancellor Rishi Sunak] is still ploughing on with his one-size-fits-all approach to withdrawing income support, despite calls from businesses to think again,” she added. 

“If he won’t, the recovery will be stopped in its tracks and the jobs crisis Britain faces will get much worse. It’s not too late to change course.”

Tracy Bedwell, managing director of Lancashire-based business Sales Training International, said: “The furlough scheme and various other government incentives have given us all a false sense of security and when they stop, unemployment will rise even more quickly. 

“The government is wasting money on schemes like Eat Out to Help Out and is neglecting small and micro limited companies that are vital to the economic recovery.

“We’re having to cut the prices of our services to remain competitive and are still at just 10 per cent of our pre-Covid-19 turnover. There’s no doubt that the worst for the economy is yet to come.”

Derby-based creative agency Think3 co-founder Lee Marples said: “Many business owners have two simple choices: reduce costs, which ultimately means a reduction in staff, or struggle to survive and risk going bust. 

“Ironically, working from home more can often result in increased productivity, so will employers actually need the same volume of staff?”

BoE governor Andrew Bailey told reporters on Thursday that the economy is “recovering,” but stressed that the progress has been “uneven.”

The bank also said it expects the downturn in Britain’s economy to be less severe than what it first feared, but warned that it could take longer to recover than previously predicted.

It added that Britain’s economy shrank by more than 20 per cent in the first half of the year after being hammered by the coronavirus pandemic.

Meanwhile, Wetherspoons added to the list of more than 6,500 jobs that have been lost or put at risk so far this week, as firms have prepared for the winding down of the furlough scheme.

The company said that it would likely lay off around one-third of its head office staff. Jobs in its pubs will not be affected.