Almost every nation’s economy has been immensely affected by the pandemic in one way or the other. However, the Coronavirus seems to have its claws on the economic sector of the United Kingdom. The reason is not far-fetched as the rate of people infected with this virus increases each day significantly.
Both the first wave and the consequential lockdown rule caused a lot of delay on the UK economy. Although the emergence of vaccines to cure or make humans immune to the virus has tried to create a level of economic recovery in the Uk, the delay and damages that this virus has caused are on the high side. Britainreviews.co.uk shows a large percentage of how this virus affected different companies
Regardless of how much the virus has inflicted damages to the UK economy, economists believe that the quick deployment of Coronavirus vaccines will help the economy gain its feet back in the world’s economy. However, when the vaccines are yet to be available to everyone, the rate of crisis such as shutting down of businesses, cutting down the workforce, amongst other things, has immensely gone overboard. The following are the ways through which Coronavirus has damaged the Uk economy so far: –
1. Economic Impact
As explained earlier, the virus has caused a lot of setbacks and recession in the UK economy. As of April 2020, the UK GDP got reduced to 25% than its usual rate as of February 2020. After the first wave of the virus, economic activity was restored gradually, and the economic pattern picked up slightly. However, things took a turn for the worse as the lockdown, which was eased, was back again in November. Hence, there was a slight fall in GDP in November. At this time, the GDP was 9% lower than it was before the pandemic struck.
Briefly, in December, the restrictions got eased. However, the restrictions were back again as a new variant of the virus hit the Uk differently. During this period, the number of Covid-19 patients became increased. The effect of this recent lockdown and restriction is most likely an economic fall in the GDP for the first quarter of 2021.
On the bright side, the coronavirus vaccines’ hope shows that the virus and its effects on the UK economy will soon come to an end.
In essence, there was a massive fallout in the UK economy in 2020. The Bank of England, at some point in 2020, issued a forecast of UK GDP growth of -11% in 2020 and 2021, a +7.25%. Therefore, the UK economy’s resuscitation may take some time in 2021 after the pandemic becomes curbed.
2. Public finances
The public finances in Uk have become immensely affected by the pandemic. The spending of the government keeps increasing while the tax revenues are falling. As a result of this, the government runs into debt as it has to keep borrowing funds to support the citizens.
The longer the pandemic’s spread continues, the more extended and more outstanding the debt the uk government has on its neck.
3. Policy responses
The nations of the world have come up with different policies to help secure their economies. The Uk government is not exempted from this action. The government and the Bank of England already set series of policies to help serve as support for workers and businesses in the country. The need for these policies stems from the fact that the economic damage caused by the virus forced several businesses to shut down their businesses and workers to become laid off and without a job or any means of survival.
The economic recovery of the Uk economy is significantly dependent on the virus’s path and the strength of the recovery. Reading UK financial services review will help one to learn more about the economy.