A report published by the Centre for Economics and Business Research (CEBR) estimates that the pandemic-driven lockdowns have caused a loss of more than £250 billion to the UK economy. Since the first round of lockdowns that were imposed around one year ago, the UK has suffered the most severe downturn seen in modern times, with the poorer parts of the nation being especially hard hit.
According to CEBR estimates, the gross value added (GVA) – a measure of the value of goods and services produced by the UK economy less the input costs and raw material costs, works out to around £251 billion lower than normal levels. The capital, London, alone accounted for the bulk of losses, causing up to £51.4 worth of loss to the economy, followed by south east and east of England, which suffered losses to the tune of £34.7 billion and £26.6 billion respectively.
Economist at CEBR, Sam Miley, remarks, “Consumer footfall has plummeted, businesses are still shut, and many individuals have found themselves out of work. Further bouts of area-specific restrictions have added some regional variation to economic fortunes, a matter made all the more pertinent given the government’s promises to ‘level up’”.
Meanwhile, official estimates point at a 9% reduction in UK’s GDP from February 2020, just before the pandemic. Even as economic recovery is expected to take off in the near future, supported by a robust vaccine distribution program, the CEBR cautions that recovery could be uneven, with some regions expected to suffer from a greater rate of unemployment and business closures.