The latest figures from the Office for National Statistics (ONS) show that the UK Gross Domestic Product in February 2021 was 9% down on the 2020 figures. This is similar to what has been reported in the press and monthly production in February was down 5% and manufacturing 5.7% lower than the equivalent figures for 2020. Source: https://www.ons.gov.uk/
Given we are still in lockdown and have been for much of the last year, these figures are not unexpected. On the positive side, The Bank of England (BoE) chief economist Andrew Haldane has commented that the UK economy is like a “coiled spring” and that consumer confidence would surge back thanks to the vaccine programme. We do hope so and most clients we speak to are getting ready to a return to some kind of normality and have been planning ahead.
Today, BoE Governor Andrew Bailey stated the UK economy will recover to its pre-Covid level by the end of this year, albeit with a cautionary note on the level of uncertainty still surrounding the virus.
As the UK vaccination programme proceeds at pace, the government has said it is still too early to book a foreign summer holiday despite plans to end the lockdown by the end of June. The earliest people from England will be able to travel abroad for a holiday is 17 May, when the government hopes to move to step three of its lockdown exit plan. This date is dependent on the four tests being met, which are infection rates do not result in a rise in hospital admissions, the vaccination programme staying on track, new variants do not change the Governments risk assessment and vaccinations prove effective in reducing hospitalisations and deaths.
As we wait for the lockdown to end, the high street may be very different this year. Retailer John Lewis has warned of “painful” store closures and other high street shops have closed their doors for now and will not be reopening. The government is mindful of this and further support for commercial tenants has been announced with the ban on commercial evictions extended to 30 June. The grants and supports may help some but expect to see gaps on the high street when lockdown ends. In the medium term there is brighter news ahead as online sellers like Amazon and others look to establish a high street presence, albeit without tills!
Last week we saw the Government announce its vision to boost connectivity across the UK through improved transport infrastructure. A consultation will launch this spring on reforming Air Passenger Duty tax in a further step to boost transport connecting the whole of the UK. This was followed by the announcement of funding to support Derry to London flights. Loganair is set to continue operating 13 return flights a week.
Previous announcements include the Slots waiver, extended to provide the aviation sector with flexibility and protects environment as airlines will not have to operate carbon-inefficient ‘ghost flights’ to retain their slots and in January the government announced funding for airports and ground handlers. A new recruitment website for the aviation sector – The Aviation Skills Retention Platform launched. The platform is an ‘online skills and recruitment centre’ and is specially tailored to find jobs for candidates who currently may be unable to work as a result of the pandemic, or similar roles that match their existing skillset. The government has partnered with several leading employers, including the Civil Aviation Association, BAE Systems and Rolls Royce to offer an initial 2,185 vacancies, with more added every day.
As the UK opens up after almost a year of lockdowns we can expect more announcements on rebuilding and improving infrastructure as part of the Government’s policy to reduce unemployment and to “Build back better”.