t appeared from business surveys last week that Britain’s private sector was surging back to life. But on the streets of Harlow, Essex, opinions about the state of the post-lockdown economy are mixed. Nel Amodei, 46, is trying to rebuild trade at her fledgling coffee shop in Harlow’s old town, Nel’s, launched 10 weeks before the UK closed down in March – and said things were still not normal. “People are spending money again, but this is a luxury,” Amodei said. She charges less than £3 for any large coffee, but points out that high numbers of people in one of London’s most affordable commuter towns are being made redundant. Around 13,000 Harlow residents – out of a population of more than 80,000 – are having 80% of their wages covered by the government furlough scheme, according to local Conservative MP Robert Halfon. Amodei added: “When I first reopened in May – for takeaway only –it was a novelty. Now some days are great but it’s not consistent like it used to be.” Her brother, Antonio Giambrone, 33, runs a barber shop down the street and talks of a hit-and-miss recovery. When lockdown lifted for hairdressers in early July, his team initially did 700 haircuts. However, since then trading has been mixed, and he said the past week was “rubbish”. The same uncertainty underpins a slew of data published last week. Despite the generally optimistic picture painted by figures covering sectors from manufacturing and retail to accounting and marketing, it is not clear how long the current boost will go on. According to many economists, the bounce-back from the pandemic could last just a few months before petering out. A fragile rebound will fall victim to rising unemployment, which they argue could be heading towards 10% by October as the furlough scheme ends and many other measures designed to keep workers in a job are wound down. Chris Williamson of data provider IHS Markit is one who believes that the current trend for laying off workers is storing up trouble and could eventually see the recovery stall. IHS Markit’s surveys of manufacturing and service businesses in July, published last week, provided an early verdict on the recovery. They showed output up strongly from June, but that firms were not only continuing to lay off workers, as they had in June, but doing so at a faster rate. “It is a worrying sign that means unemployment is going to rise and choke off the recovery,” he said. His comments echo those of two senior Bank of England officials who warned that a V-shaped recovery was far from assured. Silvana Tenreyro of the London School of Economics, who joined the central bank’s monetary policy committee three years ago, said last week she was worried that consumers would continue to be reticent about venturing out to buy goods and services. Official retail sales figures released last Friday told a different story. The data for June showed retail sales rising by almost 14% from lows in May to around pre-pandemic levels. But much of the increase was in online shopping, and could be said to support her prediction of a “jobless recovery”, even with the return of the consumer. This reluctance to go out and spend money was supported by a flatlining consumer confidence index. The GfK confidence barometer for July remained at -27, the same level as June, following increases from a low point of -34 in April. In February the barometer stood at -7. Speaking to MPs at her re-appointment hearing, Tenreyro said: “Spending is going to suffer because of the perceived health risks, and this will feed into higher unemployment and lower incomes.” She added that the UK faced a negative feedback loop as lower incomes in turn caused lower employment rates. Her colleague on the bank’s nine-person committee, Jonathan Haskell, said in a speech last week that a fear of redundancy was likely to prey on the minds of workers, prompting them to save vital funds and not spend over the coming months. James Smith, an economist at ING bank, said a week’s worth of data gave worrying signals. “A safety-conscious consumer and the increasing financial challenge posed by rising unemployment suggest that the overall economic recovery is unlikely to be a full V-shape. “Despite a strong recovery in retail sales during June, we don’t expect the size of the UK economy to return to pre-virus levels until 2022 or later.” Other data sets chimed with the concerns of the Harlow siblings. The IHS Markit surveys found that one in three service providers reported a fall in employment in July, citing the higher costs of doing business and weaker-than-expected demand as reasons for shedding jobs. Williamson said he was concerned that the survey also found a distinct weakness in the outlook from manufacturing businesses. Factory owners said they were laying off staff, though a question mark remains over how many redundancy notices have actually been handed out while the furlough scheme remains in place, covering most of the cost of employment. Nevertheless, the lobby group for manufacturers, Make UK, has called for an extension of the furlough scheme, saying its own surveys show staff are losing jobs now, and many more are expected to be laid off over the next couple of months as the cost to employers of furloughing staff increases. Chief executive Stephen Phipson warned that the redundancy plans he had seen across the industry made for “very painful reading”. He said it was vital that the chancellor, Rishi Sunak, extended the furlough for the worst-hit sectors of manufacturing to limit the damage to their long-term prospects. Almost a third of companies are planning to make between 11% and 25% of employees redundant, the Make UK survey found, while just under 8% of companies plan to make between a quarter and half of their workforce redundant. Phipson also urged the chancellor to consider measures introduced by Germany and France – such as buying equity stakes – to boost demand in the aerospace and automotive industries in particular. “These sectors are vital to the future of industry and are at the forefront of developing new technologies which will be essential to the success of our economy,” he said. Williamson agreed: “With the furlough scheme ending in October, there is clearly a potential for employment to fall further unless demand picks up. Furthermore, not only do many consumer-facing businesses remain especially hard-hit by the pandemic amid ongoing social distancing, but we remain very concerned about the extent to which the recovery could be smothered by a lack of effective post-Brexit trade deals. “This is only the very start of the climb out of the valley caused by the downturn, with a mountain still ahead of us.” Back in Essex, the majority of the retail and service businesses on the pedestrianised high street in Harlow, some 20 miles north-east of London, have reopened, but last Friday afternoon there was just a trickle of shoppers out and about, and the only (short) queue was outside the Co-op food store. Amodei’s landlord charged her full rent throughout lockdown, and she said she was currently working just to cover her bills, with one staff member still furloughed. “I think people need a bit of confidence,” she said. “For now, we’re just plodding on.”