Rolling coverage of the latest economic and financial news
Earlier:
- IoD: government must provide more support if lockdown extended
- Hospitality firms face losing £3bn in sales
- Moratorium on rent arrears and longer business rates holiday needed, say firms
- Night Time industry: some firms won’t survive without more help
- Delaying England’s Covid reopening ‘could keep thousands out of hospital’
Rupert Thompson, Chief Investment Officer at Kingswood, is also confident that a four-week extension to lockdown restrictions won’t derail the recovery:
The UK GDP numbers out last week confirmed a rapid recovery is well underway. Activity grew 2.3% in April and is now only 3.7% below pre-pandemic levels.
A four week delay in the final easing of lockdown restrictions will be the last news the hospitality sector wants to hear. But it should not derail the recovery or prevent the economy recovering all its pandemic losses within the next few months.
A four-week delay to the easing of the final domestic COVID-19 restrictions beyond 21st June is unlikely to prevent the UK economy from climbing back to its pre-pandemic size by the autumn, says Paul Dales of Capital Economics.
He gives three reasons why the delay wouldn’t be a big blow to the economy:
First, while the restrictions are a big deal for nightclubs, restaurants and pubs, nightclubs add not much more than 0.1% to GDP. And while pubs and restaurants account for 2% of GDP, allowing more people indoors was never going to boost activity by as much as when they reopened outdoors in mid-April and reopened indoors in mid-May.
Second, a delay of four weeks would just mean that the boost to activity from the final easing of restrictions comes a month later.
A four-week delay to the easing of the final domestic COVID-19 restrictions beyond 21st June is unlikely to prevent the economy from climbing back to its pre-pandemic size by the autumn. https://t.co/W07zCxrUkA pic.twitter.com/wKzYqo6PlP