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A second lockdown will push the economy into another nosedive and cause a double dip recession, experts warned.
Tighter restrictions on the coronavirus will send the nation’s already fragile economy into a spiral, with economists forecasting a reduction of as much as 8 percent of GDP in the last quarter of 2020.
It happens that the prime minister will not address the meeting of the Confederation of British Industry (CBI) for the second time in its 55-year history.
The annual conference takes place today, 48 hours after the announcement that much of the economy would be shut down in an attempt to stop the spread of the virus.
The UK announced 23,254 more Covid cases and 162 deaths yesterday, the biggest increase on Sunday since May 24, when a second wave of coronavirus engulfs the UK.
Boris Johnson is expected to dispatch Business Secretary Alok Sharma to address business leaders in his stead.
Prime Minister Boris Johnson will not address the meeting of the Confederation of British Industry for the second time in its 55-year history, but will instead send Business Secretary Alok Sharma in his place.
Business Secretary Alok Sharma (left) will attend the CBI meeting today after the organization’s president, Lord Bilimoria (right), announced that the prime minister would not speak at the meeting.
The organization’s president, Lord Bilimoria, told BBC Radio 4’s Today program: “It is absolutely normal, in the history of the IWC, for the Prime Minister of the day to address the annual conference.
“As far as I know, this has not happened once in history.
He will not address us this morning.
“However, we are hopeful that at some point he will relate to us.”
Business leaders are desperate to hear the government’s assurances amid mounting uncertainty about the future of the economy.
These are said to include a roadmap to emerge from a second lockdown and guarantees on a Brexit deal before the end of the year.
The latest data released by the Office for National Statistics suggests that the UK’s V-shaped recovery from the coronavirus crisis is slowing down.
Economists have said that the nation faces a double dip recession as the country sinks into lockdown for the second time.
They forecast that domestic production is likely to contract 5 to 8 percent in the final months of 2020 after the recovery seen during the summer.
Howard Archer, chief economic adviser to the EY Item Club economic forecaster, told The Times: “There seems to be no doubt that a new national shutdown will cause the economy to contract in the fourth quarter, and quite possibly by an appreciable amount. “.
The warnings come at a time when businesses are borrowing at an all time high and the aviation and travel industry is on its knees when another travel ban is introduced.
The EY Item Club research also found that net loans from banks increased to £ 43.2 billion between January and August from £ 8.8 billion in 2019.
This is a five-fold increase compared to last year’s figures.
CBI Managing Director Dame Carolyn Fairbairn has said that a second UK lockdown spells’ a real body shot for business’, while the next few weeks should be used ‘to prepare for what could come. ”
Outgoing CBI CEO Dame Carolyn Fairbairn said yesterday that a second shutdown was a “real blow” to the economy.
He added that the next four weeks should be used “to really prepare for what’s to come,” as salons, gyms and the hospitality industry are all set to close their doors once again.
She said: ‘We have to do everything we can to minimize the damage from the second block.
“We need to keep as much of the economy open as possible, and in fact, because there are now more secure companies in Covid, manufacturing and construction should be able to stay open.
“The fact that we have open schools is really fundamental because people can go to work.
“We need to protect the jobs and the economy and the fact that we have the job retention plan, the permit, the continuation is really critical.”
Dame Fairburn will warn in a speech on the opening day of today’s conference that young people have been particularly hard hit by the recession, and that the havoc caused by Covid could create a ‘lost generation’.
She will recommend the creation of a National Commission for Economic Recovery, bringing together business, government, unions, education and other parts of civil society, and will call for work to begin before the pandemic reaches its peak. finish.
In announcing the closure on Saturday, the prime minister described the pandemic as “a constant struggle and a balance that any government has to make between life and livelihoods, and obviously lives must come first.”
He said: ‘I have no illusions about how difficult this will be for companies that have already endured so much hardship this year and I am really very sorry, and that is why we are going to extend the license. system until November.
‘The licensing system was a success in the spring, it helped people in companies at a critical time. We will not finish it, we will extend the license until December.
The draconian measures, which are billed as ‘Level Four’ on the government’s sliding scale, take effect as of midnight Thursday morning after Sage’s grim model projected the virus could kill 85,000 this winter. , well above the ‘reasonable worst case’ above.
The brutal squeeze will see nonessential shops in England close until December 2, as well as bars and restaurants despite the “absolutely devastating” impact on the already paralyzed hospitality sector.
Cabinet Office Minister Michael Gove revealed that the restrictions could be extended beyond the December 2 deadline if the R rate does not fall.
Earlier this month, it emerged that the UK economy grew by just 2.1 per cent in August as recovery from the impact of the pandemic stalled despite Rishi Sunak’s Eat Out to Help Out scheme, for below the 6.4% expansion recorded in July.
The economic recovery was losing steam in the face of regional lockdowns and rising unemployment, but now forecasters are warning that the economy will sink again after the strong recovery during the summer months.
Business leaders warned of the dire consequences of a second lockdown on their balance sheets and staff.
GVC, the betting group behind Coral and Ladbrokes, has warned that it could take a £ 34 million profit hit if all of its main betting shops are forced to close for the entire month.
The company said the impact of the closures in other UK regions will be £ 27 million and £ 10 million from the closure in other European countries that are already experiencing their own second closures.
