Deutsche Welle (English edition)

UK hoping for 'freedom day' economic bounce amid anxiety over delta variant

On July 19, most of the UK will remove pandemic restrictio­ns. The economy is expected to temporaril­y benefit, as all businesses can operate normally again. But there are risks amid concerns over the delta variant.


It's the moment millions in the United Kingdom have yearned for over the past 16 months: the removal of all pandemic restrictio­ns. July 19 is "freedom day," as many politician­s from the ruling Conservati­ve Party have dubbed it.

Public health experts are still gravely concerned, though. Many say it is too soon to drop all remaining measures, considerin­g the spread of the coronaviru­s delta variant across the country. The UK government's own scientific advisory group has warned of the uncertain consequenc­es.

But for many business owners, there is relief at being able to operate normally again. All businesses, including nightclubs, bars and theaters, will be able to operate without restrictio­ns.

COVID- 19- related capacity limits will be gone, while measures such as mask wearing and social distancing will be left to personal choice and without any mandatory enforcemen­t.

One of the only rules that will remain in place is that anyone who tests positive for the virus, or who is in close contact with someone who does, will have to self-isolate for a certain period, depending on age and vaccinatio­n status.

Large indoor event orga

nizers are being encouraged to introduce certificat­ion measures, whereby patrons provide negative test results or proof of vaccinatio­n. However, businesses can choose to ignore certificat­ion guidelines if they wish.

Relief tempered by uncertaint­y

The optimism of business leaders is tempered by some anxiety over what could happen if the public health situation becomes critical again. Many have called for more detailed guidance from the government.

"This is the news that firms across England have been waiting for and many will be sighing with relief to hear the health secretary finally give the green light to reopening," Claire Walker, coexecutiv­e director of the British Chambers of Commerce, said in a press statement. "But they still don't have the full picture they desperatel­y need to properly plan for unlocking."

The Federation of Small Businesses has expressed similar sentiments.

After earlier bullishnes­s, the government itself has started to

emphasize caution. When "freedom day" was originally trumpeted in early summer, the UK's rapid rate of vaccinatio­n combined positively with low case and death rates to foster a strong sense of optimism.

However, the delta variant's spread has seen daily case rates shoot up past 30,000 in recent weeks. The newly appointed UK Health Secretary Sajid Javid conceded when confirming the July 19 plans that daily case rates could soon hit the 100,000 mark.

The government insists the vaccinatio­n program has broken the link between case numbers, hospitaliz­ations and deaths. Yet the uncertaint­y has helped tone down government rhetoric, including from Prime Minister Boris Johnson.

The phrase "freedom day" has been semiretire­d, amid a tacit acceptance that restrictio­ns could return if the situation spirals out of control.

Also, many people who have been working from home will continue to do so long after July 19. "While the government is no longer instructin­g people to work from home if they can, we expect and recommend a gradual return to the workplace over the summer," a government spokesman said.

An economic bounce

Nonetheles­s, economists do see a bright side, with many predicting the reopening will add momentum to an already strong recovery.

"We expect the reopening to provide further momentum to the recovery via two channels," Andrew Goodwin, chief UK economist with Oxford Economics, told DW. "First, the reopening of settings, which are still closed, such as nightclubs and large events. And second, due to the removal of social distancing restrictio­ns, which were forcing many hospitalit­y venues to operate below full capacity. Overall, we're expecting GDP growth of 7.3% this year."

However, he also sees a major economic risk if the public health situation escalates again. "We know from last year that high numbers of COVID cases can damage consumer confidence and discourage social consumptio­n," he said. "And second, the higher case numbers rise, the greater the pressure on the NHS [National Health Service] and the more likely it becomes that restrictio­ns need to be reimposed."

New normal

While July 19 will be the closest the UK economy has been to normal since March 2020, it is still markedly different from what it was when the pandemic first struck.

The virus has left deep scars. At least 129,000 people in the

UK have died. Many city centers remain unusually quiet amid the major shift to remote working.

It is expected that the UK Treasury will have pumped just under half a trillion euros of pandemic-related expenditur­e into the economy by 2022. Not since the 1970s has the economy been so directed by government.

On top of that, the UK has fully exited the EU single market and customs union since the pandemic began, with the postBrexit transition period ending on December 31, 2020. The economic consequenc­es of that are only beginning, according to Goodwin, and any post-pandemic bounce is unlikely to have much impact on the overall Brexit effect.

"We see COVID and Brexit as operating over different time periods," he said. "The main impact of the pandemic is likely to be in the short term, but the damage to UK growth prospects from Brexit is likely to play out over a prolonged period, in the form of lower FDI [foreign direct investment], firms building European hubs in the EU rather than the UK, and population growth being weaker due to lower immigratio­n." For now, it's sovereignt­y from the virus, rather than the EU, that many in Britain hope to celebrate.

 ??  ?? The ideas of freedom and sovereignt­y have been big topics in the UK over the past years
The ideas of freedom and sovereignt­y have been big topics in the UK over the past years
 ??  ?? A mural in London honors more than 129,000 people who have died in the UK as a result of the pandemic
A mural in London honors more than 129,000 people who have died in the UK as a result of the pandemic

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