The British economy continues to absorb a shock until another comes to enter it in a spiral of losses and red indicators, and the money and business market barely recovered after the start of the vaccination process against the Corona virus until it returned to zero, after the spread of a new strain of Corona virus was revealed, and large parts of The country is in a new lockdown that could last for months.
The Guardian described the economic situation in the United Kingdom as the worst in three centuries, especially with regard to the rate of growth. No wonder this after the successive blows that began with the Brexit years and the tough negotiations that finally succeeded in reaching a historic agreement. Then the Corona epidemic and its accompanying closure and quasi-stoppage of the wheel of growth, and finally the return of the closure due to the spread of the new strain of the virus.
Contraction and pessimism
The British economy is moving towards entering the first double recession in half a century, due to new fears of a new comprehensive closure and the reluctance of citizens to consume, especially during the Christmas period, which caused the commercial sector losses that could reach two billion pounds (2.71 billion dollars).
This comes after the British economy declined by 8.6% during the period between July and August, compared to the same period last year. After the easing of closure measures, during the months of October and November, the British economy achieved a record growth rate, which revived hopes to compensate for a few of the losses of the epidemic.
The winds of the epidemic were not desired by the ships of the British economy, after announcing the spread of the new strain of the Corona virus, as it is expected that the gross domestic product will decline by 2% during the last quarter of this year, which means that the British economy will end 2020 with a 10.6% decline of output Rough procedure.
According to the expectations of the “Financial Times” newspaper, the situation will not be better during the next month, as the series of decline in the internal output continues by 4% at the beginning of 2021, which means a loss of 7 billion pounds, a figure as large as “is acceptable.” Given current conditions, “according to the British Economic Journal.
The state of suspicion and lack of confidence in the British economy prompted the British to refrain from consumption, as the saving rate rose to 16.9% in the third quarter of this year, according to the figures of the National Statistics Agency, and this percentage is higher than the 8% that was the saving rate during the ten years Past.
Unemployment and poor spending
The British government tried hard to save jobs and control unemployment figures during the quarantine, by launching a government program that requires the government to pay 80% of employees’ wages, within the limits of 2,500 pounds ($ 3,400), in exchange for their institutions pledging not to lay them off work throughout the quarantine period.
Last September, some positive indicators showed an improvement in the British economy, which prompted the government to announce the end of its job-saving program in October, but the second wave and the spread of the new strain of the Corona virus prompted Treasury Secretary Rishi Sunak to extend This program will continue until next April, after it appeared that abandoning it would lead to the loss of more than two million jobs.
More than 5 million workers in the United Kingdom are currently benefiting from the government support program, which has cost the state treasury 50 billion pounds (68 billion dollars). However, it is expected that the number of unemployed will reach 2.6 million by the end of next April. .
The National Statistics Agency figures show that the sector most affected is the tourism and entertainment services sector, and the period between July and October recorded 370,000 people losing their jobs, the highest number since 1992, bringing the unemployment rate to 4.9%.
The new closure eliminated the hopes of merchants, after e-commerce recorded an increase in its activity by 19% compared to last year, and all expectations indicated that consumption would reach a historical record during Christmas, and that it would reach more than 100 billion pounds (135 billion dollars).
Expectations collapsed after a new lockdown was announced in most regions of the country, and according to Statista, the volume of spending will reach 80.9 billion pounds, a decline of 12.1 billion pounds, compared to last year in which the British spent a total of 91.5 billion pounds.
This situation increased the size of the deficit in the state’s general budget, which reached 31.6 billion pounds at the end of last month, compared to 26 billion last year.
In order to ensure job protection measures, the government was forced to increase its borrowing volume, to a record level of 241 billion pounds, compared with 188.6 billion pounds last year.
All these figures, unprecedented in the history of the British economy, will lead, according to the British Budget Office, to the budget deficit jump to 394 billion pounds during the fiscal year 2020-2021, the highest number since World War II.
After the historic agreement between the European Union and Britain, and to spare the country losses that would have been the worst in decades, the British hope that the country will emerge from quarantine quickly, after vaccinating millions of the most vulnerable people in the face of the virus.