With Britain suffering the biggest economic hit of any G7 economy (Canada, France, Germany, Italy, Japan, United Kingdom & the United States), between April and June when output fell by 20.4%, the deepest recession since modern records began in the 1950s, it was welcome news to hear The Bank of England stating that they believed Britain’s economy was on course to recover faster than it had forecast last month, despite the output in the July-September period still being expected to come in 7% lower than in 2019’s final quarter.
It appears that a lot of the growth in the economy is coming from the online market with sales standing 4% higher than before the Covid-19 crisis took hold of the country. Despite this, The Bank of England are still warning that there’s a lack of clarity over our economic recovery – due in part both to the rising cases of coronavirus infections, local lockdowns and Brexit. Because of the uncertainty, they are holding interest rates at 0.1%, a historic low which is hoped to encourage businesses and consumers to spend more. The bank has signalled that it has no intention of raising interest rates until “significant progress" has been made in getting inflation back to it’s 2% target. It is currently at a five-year low of 0.2% with them not expecting this to return to target levels for another two years.
As well as online sales, the ‘Eat Out to Help Out’ scheme helped the economy recover in August. However, figures from the Office of National Statistics (ONS) showed the number of British adults visiting restaurants, pubs and cafes fell for the first time since July after the governments ‘Eat Out to Help Out’ scheme ended, dropping to 30% in the week to September 13th from 38% in late August.
The Office of National Statistics (ONS) also found that while 1,004 businesses entered voluntary dissolution each day in the week beginning 5th September, this is consistent with the same period last year, suggesting that while jobless figures have risen company failures have not yet increased as a result of the pandemic. This could be due, as industry experts have stated, to the fact the furlough scheme hasn’t ended yet.
It may seem that overall our economic future is bleak, and it is true that we have a tough few years ahead, but the growth we have seen so far represents the green shoots of recovery and should be celebrated.