Covid-19

The theory behind a V-shaped recovery relied on the assumption that the economy would open up almost as quickly as it shut down. This did not happen. The UK moved at a much slower pace than its European counterparts exiting stringent lockdown measures. And already restrictions are being implemented again. August’s GDP figures were surprisingly dismal, and now all future monthly updates for economic growth will be affected by a longer list of restrictions that are bound to impact recovery. As a result, scenarios for the UK’s economic recovery are being revised to reflect this. In the last day, we’ve had two updates: one from the IFS’s Green Budget (in association with

Unemployment is creeping up. For months it remained stagnant, as the combination of the furlough scheme and people keeping out of the jobs market kept the rate deceptively low. But over the past few months, it has started to increase, with today’s labour market overview from the Office for National Statistics revealing a 4.5 per cent unemployment rate — the highest level in three years. There’s a sliver of hope in today’s data, which shows job vacancies are up Still, at first glance you’d expect the unemployment rate to be much worse. After the largest economic contraction in three hundred years, an increase from 3.9 per cent at the start

August should have been a relative boom for the British economy: restrictions were the most relaxed since the Covid crisis began. Businesses in the hospitality and leisure industries were largely allowed to reopen by this point, and public transport guidance changed to allow non-essential workers to return to the office. On top of these liberalisations, schemes like Eat Out to Help Out were brought in to encourage – even subsidise – more economic activity. Yet growth figures fell flat, increasing by 2.1 per cent – roughly half of what was expected by economists. It appears economic recovery started to stagnate (down from June’s 9.1 per cent and July’s 6.4 per

How popular are circuit breakers? The latest Covid-19 news from Ireland would suggest support varies dramatically between the scientists and politicians. Speaking on RTE, Leo Varadkar revealed the National Public Health Emergency Team had recommended moving to ‘level 5’, which would have amounted to a ‘circuit break’ and another shutdown of the Irish economy. Pushing back, Varadkar told the national broadcaster that outstanding questions about the effectiveness of a temporary shutdown could not be answered to his satisfaction: ‘We didn’t feel it had been thought through properly. For example, we asked for some comfort that four weeks might be enough… They weren’t able to give us that comfort.’ This is

When Rishi Sunak was appointed Chancellor in February, he must never have imagined that his first address to the Conservative party conference would be made to an empty room. Nor would he have expected to have his entire speech dominated by a pandemic. Yet in his short, direct address, Sunak barely strayed from Covid-19. He reminded the public of the government’s vast interventions to curb the impact of the virus — and hinted at what steps might be taken in future as the Treasury deals with the aftermath of our six month spending spree. In a run-down of the many schemes — and billions of pounds — directed towards the crisis so

Cineworld is to close its 128 cinemas – saying that the Covid restrictions have made its business “unviable”. It’s terrible to see that word applied to the cinema industry – and even worse to think of the 5,500 jobs this will impact. But the truth is that many businesses can’t survive what will be a year’s worth of restrictions – based on PM’s timeline where he’s talking about some kind of scientific breakthrough by Easter. The final straw for Cineworld was the delay of the new 007 film No Time to Die, now due out next April on the logic that this would maximise takings.  But how many cinemas will still be around then to show this

The UK economy is no longer hibernating; it is ‘adjusting’. Today’s measures announced by Chancellor Rishi Sunak are designed to help an economy expected to limp through the coming months, quite painfully in certain areas, hopefully on its way to recovery. But are they enough? The role of the government and the employer has switched: the six month jobs support scheme will see the state contribute to workers’ wages if needed, but now the employer will be paying over 50 per cent of the costs, with the government paying 22 per cent. The critical difference is that employees must be working in order to receive the subsidies: a minimum of a third

When Chancellor Rishi Sunak extended the furlough scheme back in May, he committed more support than anyone expected. In June and July, the government continued to pay 80 per cent of employee wages (with a cap of £2,500 per month) and has also picked up the majority of the tab in August and September.  But as the scheme comes to an end after 31 October, calls have grown louder for it to be extended again. So far Sunak has been adamant that it won’t be, telling the House of Commons in July that it could not continue forever. But, as with many Covid-19 policies over the past six months, it

One in seven Britons is now under increased lockdown restrictions, after a return of measures in the north-east added an additional two million people to the list. Those in Northumberland, Newcastle, Sunderland, North and South Tyneside, Gateshead and County Durham will not be able to mix with other households (outside of support bubbles) from midnight, while restaurants, bars and pubs will be subject to a 10 p.m. curfew. Health Secretary Matt Hancock announced the latest lockdown measures in the House of Commons this morning, citing a rise of Covid-19 cases in the area. Despite more than ten million people in the UK now being subject to some level of increased

Despite experiencing the largest economic contraction in over 300 years, UK unemployment figures haven’t budged for months. The furlough scheme seems to have proved successful in shielding many jobs from getting the immediate axe, while those who were made redundant often didn’t appear in the official figures as they were not immediately looking for work. But today’s labour market overview from the ONS shows they have started to tick upward: unemployment is now at 4.1 per cent, 0.3 percentage points up from last year and 0.2 points up from the last quarter.  Breaking down the rate by age, it’s clear the young have suffered the most so far: unemployment for 16

The UK economy continues to bounce back – but it’s the coming months that could pour cold water on a V-shaped recovery. The economy grew 6.6 per cent in July, according to data from the Office for National Statistics, with the return of pubs, restaurants, hairdressers and more non-essential shops giving us another boost back towards pre-Covid levels. But there’s still a long way to go: despite a record-breaking growth rate between May and July, Britain is still nearly 12 per cent below its GDP level in February 2020, having experienced a record-breaking contraction – the biggest seen in 300 years, and the worst of any major economy during the