Economy could grind into reverse
THE Government’s new Covid crackdown could force Britain’s economy into reverse next month, stymying the recovery and hitting job prospects.
GDP is set to fall by 0.5pc in October because of restrictions introduced by the Prime Minister this week, according to economists at ING – undoing some of the progress made since the economy started bouncing back in May.
James Smith, an analyst, said: “The new rules, including covering those areas with higher levels of the virus, are predominantly focused on limiting social gatherings rather than outright closure of certain economic sectors.
“But there’s still a clear risk that further measures could be on their way if the rate of case growth doesn’t slow.” The bank said that if a two-week “circuit-breaker” lockdown is introduced as mooted in Whitehall, it could wipe 3pc off GDP.
Expanding this to include shop closures would increase the hit to 5.5pc, while a much larger lockdown affecting factories and building sites would deal a blow of 7.5pc to the economy.
If any new lockdown went on for longer than a fortnight, the damage would grow.