Partial lockdowns which discourage eating out and a return by workers to the office could shrink the economy by up to 5 per cent, a think-tank warned yesterday.
The Centre for Economics and Business Research calculated the bill for major restrictions covering sectors such as hospitality at up to £250million a day.
This would mean that national output would shrink by between 3 per cent and 5 per cent over the last three months of 2020 compared to between July and September.
The £250million bill would be a tenth of the impact of full lockdown at its peak in April.
The Centre for Economics and Business Research warned partial lockdowns discouraging eating out (above, The Old Stables Restaurant in Liverpool) could shrink economy by up to 5%
The Centre for Economics and Business Research warned that the UK could suffer if partial lockdowns lead to the public losing faith in the Government’s handling of the Covid crisis
But the CEBR has cautioned that the UK could suffer even more if partial lockdowns cause the public to lose faith in the Government’s handling of the pandemic.
Douglas McWilliams, of the CEBR, said: ‘The bigger cost is the unmeasurable cost – many people feel that progress [so far] going into reverse would knock the stuffing out of consumer and business confidence.
‘Whereas the first lockdown was bearable on the assumption that it was temporary, a second lockdown will make many people lose confidence in a recovery in the foreseeable future.’
He added that the end of the furlough scheme – which sees the Government pay part of workers’ salaries – on October 31 could also prompt swathes of job losses as ‘tens of thousands of businesses are hanging on by a thread and likely to run out of cash’.
He insisted: ‘Many people are being kept on not because of their current productivity but so that they will be available when business picks up.
‘If people start to lose hope in the economy recovering in the foreseeable future, the knock-on effect could well be a multiple of anything that could emerge from an economics calculation.’
Yesterday, it was reported 1,000 of leisure group Butlin’s (above, company safety video) 6,000 staff were at risk of losing their jobs, but bosses stressed a decision has not yet been made
It comes amid a growing backlash at suggestions the Government will impose a 10pm curfew on the hospitality sector to curb the rising Covid-19 infection rate.
… while UK ‘takes £11bn hit’ from slump in US air travel
The lack of a quarantine-free travel corridor to the US will cost the UK economy £11billion this year, a report reveals today.
Aviation bosses say the failure to reopen trans-Atlantic routes is having a devastating impact, with the hit to UK PLC at £32million a day.
It is also set to cost £45.8billion in lost trade with the US, according to the research by Airlines UK, British Airways owner IAG and aviation services firm Collinson.
Almost 20 per cent of British exports go to the US and in 2018 these were worth £121billion. There are normally four million US visitors every year. They spent a total of £3.8billion during 2019 but that is expected to fall by £3.1billion by the end of the year, the report said.
London to New York is the world’s most profitable air link and a vital route for BA and Virgin Atlantic.
But the US is on the Government’s ‘red’ list of countries from which arrivals must self-isolate for 14 days.
Heathrow boss John Holland-Kaye said: ‘This is a stark warning that action is needed immediately to safely open up connections with our key trading partners in the US.’
Stephen Sullivan, of Ziggy’s bar in South Shields, Tyne and Wear, where a new local lockdown has been introduced, said imposing a 10pm curfew has already had a dramatic impact on his customers, who normally arrive between 10pm and 2am.
He told BBC Radio 4’s The World This Weekend the current situation was ‘incredibly difficult’, adding: ‘We are somewhere between 60 and 70 per cent down on previous weekends. One of my friends had 5 per cent of their normal custom and they’ve taken the decision already to close and remain closed until such time we are back to normal.’
Asked about what would happen if there was a national lockdown, he said: ‘Without financial help, it would be impossible. It would be the end of the road for me.’
There are growing fears of a jobs bloodbath when the furlough scheme ends.
Yesterday, it was reported 1,000 of leisure group Butlin’s 6,000 staff were at risk of losing their jobs, but bosses stressed a decision has not yet been made.
Meanwhile, figures collected by think-tank Centre for Cities showed that local lockdowns put the brake on recoveries.
Economists told The Sunday Telegraph that there was now a ‘significant risk’ of a W-shaped recovery – or double-dip recession.
It came after analysis indicated economic activity in certain cities was dampened by new restrictions to tackle outbreaks.
In some areas, the reimposing of restrictions has stalled or even reversed many recoveries as more companies roll back reopenings.
In Manchester, footfall of shoppers has stalled at half of pre-virus levels in the last month.
The coronavirus restrictions in Leicester caused spending to drop back down to a fifth of normal levels after a brief recovery in the weeks following the end of national lockdown.
In Aberdeen, the bounce-back in footfall faltered after new measures were introduced. The figures there fell from 75 per cent of normal levels to below 50 per cent.
By Eleanor Hayward Health Reporter for the Daily Mail
Experts say the current daily coronavirus death toll is not grounds for a new national lockdown.
The number of deaths from the virus each day remains very far below the peak in April – and also much lower than fatalities from other causes.
Over the last seven days, there have been an average of 21 coronavirus deaths per day.
The current daily coronavirus death toll is on a par with suicide – which claims an average of 18 lives a day, figures from Cancer Research UK and the Office for National Statistics show
This compares to figures above 1,000 on certain days in April when the infection was at its peak in Britain.
And official figures show that Covid-19 is responsible for a tiny fraction of the daily deaths in Britain.
Last year, there were approximately an average of 450 deaths a day from cancer, 214 from dementia and 174 from heart disease.
These figures, from Cancer Research UK and the Office for National Statistics (ONS), would be broadly similar at present.
The current daily coronavirus death toll is more on a par with suicide – which claims an average of 18 lives a day, ONS data shows.
And despite new restrictions being imposed by ministers in various parts of Britain, the country’s official coronavirus ‘alert level’ has not changed since June.
On June 19, the level was downgraded from four to three – on a five-level scale – so restrictions could be ‘gradually relaxed’.
Yesterday, Health Secretary Matt Hancock confirmed the country was still at level 3 –which means transmission of Covid-19 was not deemed ‘high or rising exponentially’.
Health Secretary Matt Hancock confirmed the country was still at level 3 but added new restrictions are being brought in because the ‘number of cases is shooting up’
But he added: ‘We’re bringing in new restrictions because the number of cases is shooting up.’
And a leading health expert said it was ‘too early’ for a second lockdown.
Professor Carl Heneghan, director of Oxford University’s centre for evidence-based medicine, said the country ‘can’t afford to go now with harsh measures’.
He told Sky News that Covid-19 was operating in a seasonal way similar to other respiratory infections, saying: ‘If we go now it’s too early. As it gets colder, as we’re inside more, there will be more coughs and colds.
‘If you’re looking at a break and when we need it, we need it in the mid-winter when we might run into problems.
‘There’s no evidence right now of what’s called a second wave.’