Coronavirus news: UK economy set to be battered by second lockdown, analysts fear | UK | News (Reports)

0
149

It is feared the new measures, which close pubs and restaurants as well as non-essential businesses, will undo the economy’s recovery after the damage it sustained from the first lockdown in March. Even before the second lockdown, some experts were concerned about the state of the economy because of regional lockdowns and soaring unemployment.

According to reports, the mixture of those two factors, in addition to the winding down of Chancellor Rishi Sunak’s job retention scheme, meant people were losing their jobs faster than they were during the 2008 financial crash.

In addition, before the new restrictions were announced on Saturday, there were fears unemployment could become as high as it was in the 1980s by Christmas.

Now, one economic adviser, Howard Archer, told The Times the economy will shrink in the fourth quarter of this year “by an appreciable amount”.

However, it is thought some areas of the economy may not be hit as hard as they were by the first national lockdown due to schools remaining open.

Analysts note this will protect the education sector and also indirectly benefit other sectors because parents will be able to go into work without worrying about childcare.

Meanwhile, the Government is set to increase spending in order to reintroduce the furlough scheme which will again provide 80 percent of the salary of those who are unable to work due to lockdown measures.

READ: FTSE 100 LIVE: London’s market edges lower amid new lockdown and Brexit trade deal push

Analysts think this second national lockdown could be particularly hard-hitting for the hospitality sector, due to the fact the Christmas season is usually so profitable.

They add the issue is made worse by the fact there is still uncertainty surrounding how long this national lockdown will last, despite the provisional December 2 date.

Prime Minister Boris Johnson said yesterday: “Christmas is going to be different this year, very different.

“But it is my sincere hope and belief that by taking tough action now, we can allow families across the country to be together.”

The UK is not alone in having re-implemented a national lockdown in the run-up to Christmas.

France, Belgium, and Germany have resorted to similar measures in order to combat a surge in coronavirus cases.

LEAVE A REPLY

This site uses Akismet to reduce spam. Learn how your comment data is processed.