The weekly cost of lockdown

Lockdown has always been a matter of trade-offs. The impact of suppressing the economy to also suppress a deadly virus has had consequences on every aspect of life, from non-Covid health treatment, to rising unemployment, to the impact on children’s education. But these costs can be calculated in something much closer to real time. New data from the OECD, analysed by The Spectator and unveiled in this week’s magazine, shows the weekly difference between a country’s economic activity now and how it compares with the year before. 

First, let’s look at change in lockdown stringency — as measured by Oxford University’s Blatavnik School of Government. When the second wave struck, Britain ended up with the tightest lockdown in the developed world. 

Now, let’s bring in the OECD’s estimates of weekly GDP. This is a new series, far more frequent than the usual quarterly data or even the monthly estimates. As you might expect, we see a rough correlation: the tighter the suppression policy, the bigger the economic damage. The further down the country, the worse the economic damage. The further to the right, the stricter the lockdown.

Strict lockdowns, unsurprisingly, make it more difficult to bounce back to pre-Covid economic levels. In the UK’s case, having some of the most stringent Covid rules translates to suffering from some of the highest levels of economic damage compared to the year before.

This data should be considered in the context of two other factors: Covid levels in various countries and vaccination progress. The UK currently has less Covid cases than the average infection rate in Europe, yet it’s stuck in the strictest lockdown.

It is also winning the vaccine race. It’s not just ahead in Europe (by a long way – see chart below), but continues to rank in the top five countries worldwide for rates of vaccination. Despite the vast majority of the UK’s over-70s having received at least their first jab, the country is still months away from major industries being allowed to reopen.

For many, the Prime Minister’s roadmap is a source of hope, which (if not diverted from) will see life return largely to normal by the end of June. But in the meantime, we can assess on a weekly basis just how much economic damage the current restrictions are causing. With some estimates suggesting that each additional week of lockdown reduces economic activity by £5 billion, expect more questions to arise about whether the current timeline for lifting restrictions is the right one.