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Summary
- Confederation of British Industry chief Carolyn Fairbairn said that the government should work towards minimising damage of this lockdown
- CBI chief says this year’s Christmas may not be beneficial for the companies across the UK
- Economists too have said the second lockdown would cause a double-dip recession
The second national lockdown might devastate the economic conditions in the country as the UK companies could face bleak mid-winter. Chief of the Confederation of British Industry (CBI) Carolyn Fairbairn’s statement came after high-end retail shops, pub chains and airlines warned that the second lockdown, from 5 November till 2 December, will impact their business to a larger extent.
Economists too have said the second lockdown would cause a double-dip recession and the country may see its GDP shrink by as much as eight per cent in the final quarter of 2020. An economist at the Centre for Economics and Business Research predicted the new lockdown can wipe £1.8 billion off every day in the UK.
Outgoing director general of the CBI Fairbairn, while speaking to a channel, said economic support for business during COVID-19 is very crucial and cautioned that if job losses were not so significant in the first phase, the second would see many more job losses. Latest data revealed that the UK economy grew by just 2.1 per cent in August as compared to the 6.4 per cent expansion recorded in July.
She said the next few weeks are vital, and the Johnson government should have handled the crisis in a better way. The gas tanks are exhausted, factories have been impacted across the country, and the retail and hospitality sectors are equally struggling. Everything would take some time to recover.
Under the new lockdown measures, non-essentials shops, pubs and restaurants will remain closed for four weeks till the 2 December. International and domestic travel will also be shut down except in case of emergencies such as work, education, or any legally sanctioned reasons.
Fairbairn said that the government should keep the economic activities going to avoid a major slump and the introduction of rapid testing 'could be a total game-changer’. Most businesses are Covid safe now, and many firms already invested millions in keeping their offices safe, so offices should remain open. Sectors like manufacturing, construction should be able to stay open.
She highlighted that Christmas is usually the best season for UK companies, but considering the current situation, businesses may not see a lucrative market.
UK PM Boris Johnson on Saturday announced a host of new measures aimed at curtailing the rising number of COVID-19 infections and the furlough scheme would be extended until December as the economy needs major support for the second lockdown in England.
Jonathan Neame, chief executive officer of Shepherd Neame, one of the UK’s oldest breweries, said the hospitality sector had lost its trust in the government’s strategy and the latest lockdown may have irreparable damage to the sector, leaving industries in an extremely difficult situation. Echoing similar sentiments, John O'Reilly, CEO at Rank Group, said the second lockdown is going to add more woes to the already struggling business.
