UK economic output to fall by a third amid coronavirus lockdown: report

Source: Xinhua| 2020-04-07 00:40:05|Editor: huaxia

LONDON, April 6 (Xinhua) -- The current level of lockdown in Britain to fight COVID-19 pandemic will lead to a reduction in economic output of 31 percent, dealing a severe blow to manufacturing, accommodation, non-food retail and construction sector, a report said Monday.

The manufacturing sector, less covered than services sector by the British government schemes to provide relief during the pandemic, is set to see the highest fall in output in absolute terms, according to a report published by the Centre for Economics and Business Research, an economic think tank.

Manufacturing is hit hard because workers can not produce goods remotely and demand for non-essential goods have plummeted. "This is estimated to cost the economy over 500 million pounds (about 614.8 million U.S. dollars) per day with production in the sector down 69 percent," the report said.

The accommodation and food services sector, non-food retail and construction sector are also expected to be disproportionately impacted. Though there is substitution to online sales in non-food retail, it is not enough to outweigh the closure of physical stores, according to the report.

The report studied the economic impact of the lockdown through 105 major industries of the economy. Some essential industries are still operating as usual, while some are constrained by remote working, employee sickness or self-isolation and some shut down entirely.

Morgan Stanley forecast last month that the British economy will contract by 5 percent this year due to the impact of the pandemic, in sharp contrast to the most recent official growth forecasts of 1.1 percent from the Office for Budget Responsibility.

The British government has launched schemes with more than 330 billion pounds (405.7 billion dollars) of loans and guarantees to help firms keep operating amid the pandemic. It has ordered cafes, bars, pubs and restaurants to close and promised to cover 80 percent of wages -- up to 2,500 pounds (3073.8 dollars) a month -- for employees who are unable to work during the pandemic.

The death toll of those hospitalised in Britain who tested positive for coronavirus reached 5,373 as of Sunday afternoon, the Department of Health and Social Care said Monday.

As of Monday morning, the number of confirmed cases of COVID-19 in Britain hit 51,608, said the department.