Nearly two million people have not worked for six months due to the ongoing coronavirus pandemic, new research has found.

Covid-19 restrictions have hit the UK economy hard, with research from the Resolution Foundation think tank highlighting the impact it has had on employment.

Long-term furlough and unemployment

The think tank has found that long-term furlough has become a widespread consequence of the coronavirus pandemic, with almost two million workers unemployed or fully furloughed in January - and had been for at least six months.

The think tank - which is calling for the damage to employment to be addressed in the Budget - said that around 700,000 workers had been unemployed for at least six months in January, with a further 500,000 workers fully furloughed and therefore not working any hours.

The report said that as some people have moved between unemployment and full furlough in recent months, the total number who were unemployed or fully furloughed in January - and had been so for at least six months - was 1.9 million.

Research also found that although the number of workers on the Job Retention Scheme (JRS) has risen to 4.5 million during the current lockdown, this is half the nine million peak experienced during the first lockdown, which could show how firms have adapted to operating through the pandemic.

However, the report is calling for the full JRS to remain in place for several months after public health restrictions have been lifted in order to give firms time to bring staff back.

‘Job insecurity remains high’

Nye Cominetti, senior economist at the Resolution Foundation, is calling on Chancellor Rishi Sunak to use the annual Budget to provide a clear path out of the furlough scheme, and acknowledge the sectors which are most at-risk from rising unemployment.

Mr Cominetti said: "Ten months into the crisis, almost two million people have now been affected by long Covid in the labour market, having not worked for at least six months.

"While the UK's economic prospects are finally looking up, job insecurity remains high, particularly among those who have spent long periods not working, or who are currently furloughed.

"The Chancellor must use his Budget to set out his own road map for phasing out the furlough scheme gradually and in a way that acknowledges where the risks of rising unemployment are highest, in sectors like hospitality.

"This would keep a lid on rising unemployment and encourage firms to bring back existing workers, while tax breaks on hiring could help more people to move jobs too."