New support needed if UK lockdowns persist, business leaders warn

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New support needed if UK lockdowns persist, business leaders warn


Boris Johnson has been warned by business leaders that a new economic support package would be needed if rising Covid-19 infections prevent further easing of pandemic restrictions next month.

Following the reopening of hospitality facilities inside the UK’s four countries, the Guardian’s latest monthly assessment of economic developments suggests the country is on track for a short-term growth boom this summer.

Retail sales have surpassed pre-pandemic levels, as shoppers returning to restaurants, pubs and cafes led to a surge in consumer spending to start repairing damage from the worst recession in 300 years.

However, concerns are growing over the variant of Covid first detected in India – B.1.617.2 – and the possibility that rising infections could delay the next phase of the government’s roadmap to relax controls in India. England.

Kate Nicholls said the Chancellor should consider extending the leave schedule if the easing of the lockdown is delayed. Photography: David Cotsworth

Kate Nicholls, managing director of UK Hospitality, said that despite the substantial progress made, the past month had been “far from a champagne moment for the industry” after the cumulative damage caused by repeated shutdowns during of the past year.

In the Guardian, she said any delay in the government’s roadmap would force Chancellor Rishi Sunak to come up with a new package of financial support and consider expanding the leave program.

“At this point, any delay in removing restrictions on June 21 will be simply catastrophic for an industry which has already lost £ 80bn in sales – two-thirds of its pre-pandemic revenue – during the year elapsed.

“If there is one, it needs to be communicated well in advance and accompanied by additional support,” she said.

Over the past year, the Guardian has been tracking the economic fallout from the pandemic on a monthly basis, tracking infection rates, eight key growth indicators and the FTSE 100 level. deep since the Great Depression, the Covid watch crisis is also monitoring Britain’s performance relative to other countries.

On the dashboard over the past month, the number of people eating out has risen to 75% above levels recorded two years ago, before the pandemic struck, amid evidence of a claim pent-up from consumers confined to staying at home for much of the year so far.

Use of public transport has reached its highest level since the health emergency first spread to Britain last year, with more people heading to towns and city centers to leisure and work than at any time since the onset of the crisis.

The reopening of non-essential stores in April helped push retail sales to more than 10% above pre-pandemic levels, while closely watched business surveys reveal the fastest monthly growth in the private sector activity since the late 1990s.

Amid an improving economic outlook and rapid progress in the Covid-19 vaccination program, unemployment fell for a third consecutive month in March, as companies stepped up their recruitment plans in anticipation of the reopening.

However, more than 4 million jobs have remained vacant, reflecting continued pressure on the economy, as social distancing measures remain in place and global travel restrictions weigh on the travel industry.

While there is evidence of a rapid economic recovery taking hold, the UK economy is expected to take until the end of 2021 to return to its pre-crisis peak. According to the National Institute for Economic and Social Research, the economy is set to suffer more than £ 700bn in lost production due to the crisis, with the fallout made worse by the mismanagement of the health emergency by the government last year and its impact. of Brexit.

Government restrictions extended beyond June could push back the point where the economy returns to its pre-pandemic peak, while the prospect of a slower recovery could lead to job losses when the government’s holiday program will be reduced from the end of next month.


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From July, employers will have to contribute 10% of an employee’s salary, which will drop to 20% in August, with taxpayer support reduced from the current level of 80%. Employees will continue to receive the same amount.

Nicholls said a package of economic support would be needed if there were any delays on the roadmap, including postponing commercial rate refunds, extending commercial rent protections and reducing VAT.

“The government should also look again at the future of the holiday program, as operators will not be able to contribute more if they continue to trade under restrictions. This would inevitably lead to the loss of a large number of jobs, ”she said.

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