Coronavirus and the UK economy – Unprecedented crisis

Report Overview

Coronavirus and the UK economy – Unprecedented crisis

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Coronavirus and the UK economy – Unprecedented crisis
To fight against the UK’s incipient pandemic, a full lockdown is in place for all but essential workers in healthcare, telecoms, food, utilities and banks
Households have cut expenditure on all out-of-home categories from transport to entertainment and shopping (apart from food), and a tsunami of insolvencies beckons. Advertising is in disarray as consumers pull spending for the foreseeable future
The Chancellor’s measures of mitigation aim to preserve businesses until the crisis ends. Wage aid will keep furloughed workers paid, although mass unemployment and recession appear inevitable

Contents

Employment at risk

  • SMEs

Recession beckons

  • Savings ratio: better than a decade ago, but not enough
  • Expenditure patterns we can predict
  • Consumer debt: low wealth households are exposed

Conclusions

List of charts/tables

Figure 1: Indexed growth by employment type (Q1 2008 = 1)

Figure 2: Employment by industry (%) & number employed (m), Q4 2019

Figure 3: Employing businesses by size, % of total and number of businesses, 2019

Figure 4: Number of employing enterprises by sector and size, 2019

Figure 5: Consumer and business confidence index and household consumption (£m)

Figure 6: GDP growth quarter-on-quarterin price and volume terms (%)

Figure 7: Growth rate of household disposable income and nominal consumption against household cash basis savings ratio (%)

Figure 8: Indexed change in total consumer spend by category (2008 = 1)

Figure 9: Average weekly household expenditure (£)

Figure 10: Average weekly household disposable income by decile and expenditure 2018 (£)

Figure 11: Percentage of households with household debt by type of debt and total wealth decile, April 2016 to March 2018 (%)

Figure 12: Total financial debt by type of borrowing, Great Britain, April 2014 to March 2018 (£bn)