Swine flu could hit UK economy in 2009
INCREASED nervousness about the damaging effects of a swine flu pandemic briefly shook travel stocks yesterday, after the the respected Ernst & Young (E&Y) Item Club warned that the virus could drag Britain’s economy into its worst recession since the early 1930s.
The influential think tank said a pandemic reaching 100,000 cases a day by August, and lasting six months, would lead to a 7.5 per cent fall in GDP this year. The slump in demand in tourism and the effect of shoppers staying away from crowded high streets could knock an additional three per cent off UK output this year, while lingering damage could cause a further fall of 1.7 per cent next year, the Item Club said.
“With the western world still teetering on the brink of deflation it is not an exaggeration to say that a pandemic on this scale could tip it over the edge,” said the Item Club.
The world’s largest cruise company Carnival, travel agent Thomas Cook and hotel group InterContinental all dropped as a result of swine flu-related jitters, despite recovering later on.
British Airways and Virgin Atlantic yesterday became the first airlines to monitor passengers at check-in and turn them away if they appeared to have the virus.