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Summary
- The ONS (Office for the National Statistics) has reported that fifty-seven per cent of people travelled to work in the last week of August as compared to fifty-five per cent in the week prior to that
- Similarly, the proportion of people working from home also dropped to twenty per cent during the last week of August 2020 compared to twenty-two per cent recorded in the week prior to that
- The government has been encouraging more and more people to join back work so that the pace of economic recovery in the country accelerates.
The country is slowly but steadily gaining back its confidence to step out of their houses and join back in their economic activities. The ONS (Office of the National Statistics) in its weekly survey has found that by the end of August at least fifty-seven per cent of the adult workforce in the country travelled to work while the people working from home shrank down to twenty per cent. This is in sharp contrast to only 33 per cent people travelling for work in the month of May 2020 when the lockdown was thrown open and large-scale economic activities were allowed to commence. Incidentally, the month of August 2020 also saw the number of people on furlough falling down to 12 per cent compared to 18 per cent registered during the previous month of July 2020, whereas the number of job advertisements for the last week of August 2020 remained at 55 per cent of its 2019 average figure.
However, despite these gradual improvements witnessed in life returning back to pre-pandemic times, experts warn that in the coming months, things might take a U-turn as the effect of the withdrawal of the furloughing scheme would start to become more apparent.
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People are still reluctant to join back work
The coronavirus pandemic has infected as many as 335,000 people in the United Kingdom and claimed at least 41,500 lives till 4 September 2020. It has also inflicted considerable damage to the economy which is now being projected to shrink by around 10 per cent for the full year, according to expert estimates.
The country which went into lockdown in the month of March 2020 to withstand the initial shock was gradually opened since the beginning of May 2020, leading to a steady recovery in some of the key sectors, and raising hopes for others. However, the threat of catching a Covid-19 infection is far from over.
A large number of people are continuing to get infected every day and authorities are scrambling for ways and means to curb the virus infection. Under such circumstances, it is but natural that everyone will be worried about their health safety when they come out and meet people.
Secondly, the continuing one-meter social distancing measures at most workplaces are also hampering work. Though these measures are meant to keep people safe, it is adversely impacting productivity levels in the UK.
Impact on the British economy
Fewer people joining back work means the businesses will take longer to recover from the lockdown induced economic shock, and it could have a cyclical effect in truncating the recovery of the entire British economy.
Fewer people joining back work would also means the office premises in the country would continue to remain empty for which employers are already paying rents, or bearing maintenance costs, which is consequently resulting in losses for them. Consequently, the value of commercial property is going down.
A slow people turnout across the banking and IT and software industries could also reduce the staff productivity. Being strong support pillar industries for the entire economy, this could slow down growth of the sectors dependent on their smooth and fast operations.
The continuing slowdown of the economy is putting further pressure on government finances, which could inadvertently impact the long-term health of the economy. The government debt is already at an all-time high level of more than 2 trillion pounds.
Also Read: Top Five Dividend Yield Companies
The effect of a vaccination drive
According to sources, the British government is already in the process of working out the details of launching a mega vaccination drive in the coming months, after a Covid-19 vaccine is ready for mass distribution. The Oxford University Jenner Institute vaccine candidate is nearing the end of its final clinical trial.
Billions of doses have already been manufactured by AstraZeneca and are in storage for mass vaccination as soon as it gets government approval. The British government has also initiated a mass rapid testing programme which will most likely run alongside the vaccination programme so as to accelerate the distribute the vaccine to the majority of the people in the country in the earliest possible time.
Accompanying rapid test systems would be able to augment this process, by allowing authorities to test people at a single location for the infection and send the infected for treatment while healthy one could be inoculated. This procedure could actually prove to be a very effective way to sharply bring down the infection levels in the country and accelerate the rate of recovery.
It is extremely important that people in the country are made more confident to come out of their houses so that the economic activities in the country bounce back at a desired accelerated pace.
The simultaneous launching of the mass testing and vaccination programme by the government to rapidly identify infected patients and inoculate others could put a cap on the rapid spread of the virus and might prove to be a great confidence booster for the masses.
This confidence will not only prompt an improvement in the consumer sentiments but will also prompt businesses to spend and expand their business activity levels at a high speed.
To sum up, the data published by the ONS has revealed a marked improvement in the percentage of people traveling to work from 33 per cent in May to 55 per cent by the end of August 2020. This definitely provides confidence to the policymakers, businesses as well as the general public that the economy is bouncing back to normalcy. However, one needs to watch out for the impact of the winding up of the government furlough scheme, that ends in October 2020.
