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Pandemic economy: The uncertain road ahead

15 June 2020
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In April, the first full month of lockdown, UK’s GDP fell by -20.4% month-on-month, the steepest decline on record, with further reduction expected in May. On 15 June, some non-essential premises re-open, but activity for the rest of the year will be depressed by social distancing—the UK’s recession in 2020 is certain to be the steepest on record

The UK’s furlough scheme avoided the massive loss of jobs and supported worker incomes. A steep rise in the unemployment rate is expected when furlough ends in the autumn, judging by the US experience

The UK’s recession is in step with its equally impaired trading partners, melting the UK’s trade. The UK must also contend with the economic impact of the exit from the Single Market transition, as of 2021

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Retail sales in April, the first full month of lockdown in the UK, declined a massive 18% in volume, excluding fuels. As shops open, retail will rise month-on-month, but continue to decline year-on-year as the level of retail remains durably impacted by recession.

Online soared to 30% of retail sales in April, up from 22% in March. The share of online will retreat in the second half of the year as lockdown eases and expenditure returns to the high street, but it will still claim 25-27% of retail sales excluding fuels in 2020, up from 19% in 2019.

COVID-19 is accelerating a significant consumer shift to online, and is bringing to a head the crisis of physical retail sales, setting the stage for paradigm shift.

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Coronavirus and the UK economy: Unprecedented crisis

25 March 2020

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 

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Access report

  • April retail sales in freefall: Online reaches record share

    28 May 2020

    Retail sales in April, the first full month of lockdown in the UK, declined a massive 18% in volume, excluding fuels. As shops open, retail will rise month-on-month, but continue to decline year-on-year as the level of retail remains durably impacted by recession.

    Online soared to 30% of retail sales in April, up from 22% in March. The share of online will retreat in the second half of the year as lockdown eases and expenditure returns to the high street, but it will still claim 25-27% of retail sales excluding fuels in 2020, up from 19% in 2019.

    COVID-19 is accelerating a significant consumer shift to online, and is bringing to a head the crisis of physical retail sales, setting the stage for paradigm shift.

    Access report

  • Coronavirus and the UK economy: Unprecedented crisis

    25 March 2020

    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  

    Access report