With economic conditions likely to remain challenging in the near term, further easing remains likely. However, with interest rates already at an historical low, extra loosening of monetary policy is unlikely to provide a significant boost to the economy. The central bank has rightly decided against moving interest rates into the negative, which risks doing more harm than good.
The focus instead should be on delivering a fiscal environment that limits economic scarring and helps kickstart a recovery. This should include taking steps to close the remaining gaps in government support, including giving businesses direct incentives to invest and hire, and stimulating consumer demand through a temporary, but significant cut in VAT.
Coronavirus and the economic impacts on the UK – 18 June 2020
The main points from the latest survey are:
• Of all responding UK businesses to Wave 6 of the Business Impact of Coronavirus (COVID-19) Survey (BICS), 79% had been trading for more than the last two weeks, 5% had started trading again within the last two weeks after a pause in trading, 5% reported intending to restart within the next two weeks, with the remainder temporarily closed, paused or ceased trading
• Across all sectors, the wholesale and retail trade (17%) and transportation and storage (10%) sectors reported the largest percentage of businesses indicating their turnover had increased compared with what is normally expected for this time of year
• Across all sectors, and amongst those who were continuing to trade, 5% of the workforce had returned from furlough leave in the last two weeks, of which the construction and manufacturing sectors reported the largest proportions returning from furlough, at 14% and 10% respectively
• Of those businesses with a proportion of their workforce furloughed, 42% of businesses reported providing top-ups to furloughed workers' pay on top of the Coronavirus Job Retention Scheme
• Wales had the highest percentage of businesses reporting they had less than six month's cash reserves at 46%, compared with 42% in England, 41% in Northern Ireland and 39% in Scotland.
The full results can be found here.
Personal and economic wellbeing in Great Britain: April to May 2020
The bulletin looks across personal and economic wellbeing covering the period from 20 March to 7 June 2020, to understand the impact of the coronavirus (COVID-19) pandemic on people and households in Great Britain. It narrowed the reference period to just two months to focus the analysis directly on changes over the lockdown period, using a variety of data sources including the Opinions and Lifestyle Survey (OPN).Main points
• Despite a surge at the beginning of lockdown, happiness and anxiety have continued to improve as on a scale of 0 to 10, anxiety has reduced from a peak of 5.2 the week ending 30 March to 3.9 in the week ending 7 June. However, our assessments of our life satisfaction and the feeling that the things we do are worthwhile have continued to fall since 20 March and are at much lower levels than before the pandemic.
• As average anxiety has fallen, the average time we think it will take for things to return to normal has increased and 1 in 4 of us now expect it will take over a year or will never go back to normal.
The details within this bulletin are most illuminating and you can find them here.
ESSENTIAL INFORMATION LINKS ON ALL ASPECTS: