Economic impact of the COVID-19 pandemic in the United Kingdom
The economic impact of the global COVID-19 pandemic on the United Kingdom has been largely disruptive. It has adversely affected travel, financial markets, employment, a number of industries, and shipping.
Main articles: COVID-19 pandemic in the United Kingdom and Financial market impact of the COVID-19 pandemicDate
March 2020 – May 2023
COVID-19 pandemic-induced market instability and lockdown
- UK cost of living crisis
- Sharp rise in unemployment
- Stress on supply chains
- Decrease in government income
- Collapse of the tourism industry
- Collapse of the hospitality industry
- Reduced consumer activity
A number of charities reported significant drops in income as a funding hole of £4 billion was identified, as fund-raising events were cancelled.[1][2]
Several individuals and groups began to raise funds for charitable organisations working to support those affected by the pandemic. 99-year-old Tom Moore raised over £28.2 million,[3] the largest-ever amount raised by a JustGiving campaign.[4][5]
The London Marathon, the world's biggest annual one-day fundraising event, was postponed from its April slot until October 2020.[1] In 2019 £66.4m was raised for charities on the day of the Marathon.[1] To compensate for the loss of income the Mass Participation Sports Organisers group organised The 2.6 Challenge.[1][6]
On 18 April, several UK artists participated in Together at Home, a live music event in which artists performed in their own homes, in aid of the World Health Organization's COVID-19 Solidarity Response Fund.[7] A version was broadcast on BBC One on 19 April.[8]
Children in Need and Comic Relief announced their first joint initiative, The Big Night In, a telethon broadcast on 23 April.[9] The event raised £27.4 million in just three hours. The UK Government promised to match the total.[10]
Northern Ireland's Chief Charity Commissioner said that the public had been "very altruistic" in its support for Covid-response causes, such as the Big Night In, The 2.6 Challenge and Captain Tom Moore, and encouraged the public to consider all of the charities in existence.[11]
The UK government announced a £750 million package of support for charities across the UK. £370 million of the money was set aside to support small, local charities working with vulnerable people, and was allocated to England, Scotland, Wales and Northern Ireland in the following breakdown
On 27 April Christian Aid advised that its annual fundraising week would go ahead through 10–16 May but without door-to-door envelope delivery and collection and the holding of associated face-to-face fundraising events in favour of encouraging online donations.[14]
Finance and the Economy[edit]
The governor of the Bank of England called on the British government to provide support to businesses affected by the virus[82] and was reported to be working with the Treasury to provide an economic stimulus package to prevent the British economy falling into recession.[83] Companies listed on the London stock markets have fallen in value, with commentators citing worries about the virus.[84] To stimulate the economy, the Bank of England cut its bank rate of interest from 0.75% to 0.25%.[85] On 19 March, the interest rate was again cut, this time to 0.10%—the lowest rate in the bank's 325-year existence.[86] On 28 March, Fitch Ratings downgraded the UK's government debt rating from AA to AA−, because of coronavirus borrowing, economic decline, and lingering uncertainty over Brexit. The ratings agency believed the UK's government deficit for 2020 might equal 9% of gross domestic product (GDP), compared to 2% the previous year.[87] The government extended its overdraft with the Bank of England.[88] The Bank of England forecasted, on 7 May, that this would turn into the UK's worst recession since the "Great Frost" over 300 years ago.[89] The Bank also predicted that the economy would recover in 2021.[90]
During the second half of March, 1 million British workers applied for the Universal Credit benefit scheme.[91][92] In April people claiming unemployment benefit rose to 2.1 million, a jump of 856,500 claims according to the Office for National Statistics (ONS). In addition the employment rate fell to 3.9% for the first quarter of the year; this period included the first week of lockdown according to ONS figure.[93]
The Resolution Foundation surveyed 6,000 workers, and concluded that 30% of those in the lowest income bracket had been affected by the pandemic compared with 10% of those in the top fifth of earners.[94] The foundation said that about a quarter of 18 to 24-year-olds included in the research had been furloughed whilst another 9% had lost their job altogether. They also said that 35 to 44-year olds were least likely to be furloughed or lose their jobs with only around 15% of the surveyed population having experienced these outcomes.[95] Earlier research by the Institute for Fiscal Studies concluded that young people (those under 25) and women were more likely to be working in a shutdown business sector.[96]
In early April, as the second quarter began, the Office for Budget Responsibility predicted that unemployment could rise to 3.4 million and the GDP could fall by 35% during the quarter.[97] By June, the unemployment projection proved correct, with over 3 million out of work for at least three months and another 4 million out of work for a shorter period.[98] And although GDP fell by only 20% during the second quarter, this was still the worst quarterly economic pullback since records began in 1955.[99]
On 25 November 2020, the Chancellor of the Exchequer delivered a Spending Review which revealed that the United Kingdom will face the worst slump in 300 years due to the impact of COVID-19. The anticipated slump this year will be near to −10%, such significant economic decline that it could surpass the Great Frost of 1709. The economic report indicated that the unemployment rate could reach 7.5% next year with the number of people out of work peaking at around 2.6 million. GDP is expected to contract by 11.3% in 2020.[100]
Betting shops[edit]
William Hill, which operates many in-person betting shops, reported that its profits during the first half of 2020 dropped by 85% compared to the previous year. It planned to permanently close over a hundred shops.[171][172]