Econ­omy could grind into re­verse

The Daily Telegraph - Business - - Front Page - By Tim Wal­lace

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.

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