Rishi Sunak warns second lockdown will have ‘significant’ impact on UK economy
Chancellor Rishi Sunak has warned that England’s second nationwide lockdown will have a “significant impact on the economy”, as today’s record GDP figures laid the ground for a steep slump over the winter.
“Obviously restrictions of this nature do have a significant impact on the economy. We’ve already seen that when we’ve done this over the spring,” Sunak told Sky News.
The chancellor warned lockdown measures across the UK would have a particular impact on the hospitality sector, “which is impacted by the ability for people to socialise”.
Retailers last week warned the month-long lockdown would deal a devastating blow for the sector, with more than 500,000 shops, restaurants and pubs across England forced to shutter in the run up to Christmas.
Sunak said it was “very hard to precisely model the impact of time-limited intervention”, adding: “But we know the economic damage is significant, we know that three quarters of a million people have already lost their jobs since it started this crisis.”
It comes after figures released today by the Office for National Statistics (ONS) showed the UK staged a record recovery in the third quarter, after GDP hiked 15.5 per cent in the three months to September.
The dramatic leap was helped by government programmes to boost spending over the summer, including the chancellor’s Eat Out To Help Out scheme.
It follows a record-breaking slump of 19.8 per cent in June, as the coronavirus pandemic and subsequent lockdown measures brought large swathes of the UK economy to a halt.
However, the growth missed analysts’ targets of 15.8 per cent growth, suggesting lockdown measures across the country have already bitten into the economy.
Sunak said the figures “show that our economy was recovering over the summer, but started to slow going into autumn”, adding that the measures the government has since taken to curb the spread of Covid-19 “mean growth has likely slowed further since then”.
The chancellor dangled the possibility of reintroducing the Eat Out To Help Out Scheme in the spring, telling Sky News: “I think it’s right that when we finally exit this and hopefully next year with testing and maybe with the vaccines as well we’ll be able to start looking forward to getting back to normal.
“I think we’ll have to look at the economic situation and then and see what’s the best form of our support, and we want to make sure that we get the economy going strongly coming out of this.”