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City A.M. – Second local lockdown could cost London more than £2bn

September 21, 2020

London could face annual costs of more than £2bn if fresh curfew measures are implemented in the capital, according to a new report.   Leading think tank the Centre for Economics and Business Research (CEBR) today warned that 10pm curfews introduced elsewhere in the UK could reverse the country’s economic recovery if slapped on London venues.   It predicted that new lockdown restrictions would decimate a return to health for Britain’s pubs…

The Times – Economy faces losses of £250m a day during second wave

September 21, 2020

The economy faces a hit of £250 million a day from a second wave of Covid-19 infections if partial lockdowns reverse the increase in people going to pubs and restaurants and returning to work, according to a new report.   The Centre for Economics and Business Research (CEBR), a think-tank, warned that GDP could fall by between 3 per cent and 5 per cent in the last three months of the year…

Will the second wave stop the economic revival in its tracks?

September 21, 2020

We’ve been consistently cautious about the recovery. A trampoline bounce in Q3 was built in and indeed looks to have happened, possibly more strongly than even the optimists had hoped. But whether this continues into Q4 and early 2021 was always in doubt. Tens of thousands of businesses are hanging on by a thread and likely to run out of cash, meaning that the risk of major job losses when…

The Times – House prices forecast to drop by 14% next year

September 14, 2020

View the full article here.   House prices will fall by almost 14 per cent next year once the government’s temporary cut in stamp duty ends and the economic impact of coronavirus filters through to the property market, according to an analysis by an economic consultancy.   Figures from the Nationwide Building Society this month showed house prices rising at their fastest pace in 16 years but the Centre for Economics and…

Despite the sharpest fall in GDP in the UK’s history, headline house prices have risen. What is driving the UK’s housing market paradox?

September 14, 2020

Throughout August, the UK housing market defied gravity yet again, with unofficial measures putting average prices at record highs. This is at odds with the wider economic turmoil, with the UK still in the early stages of rebuilding from the most severe contraction in economic activity on record. What is behind this apparent contradiction?   One factor is, of course, July’s stamp duty cut. We at Cebr estimate that July’s…

The Guardian – No return of workers to offices ‘could cost UK economy £480bn’

September 8, 2020

The UK economy could lose almost half a trillion pounds of output if workers fail to return to their offices, a study estimates.   Douglas McWilliams, a former chief economic adviser to the Confederation of British Industry, has warned the economy will not return to its pre-pandemic size until 2025 if home working continues in its current form, which would add up to at least £480bn in lost activity.  …

Take ten years to reduce the deficit and 50 years to pay off the debt

September 7, 2020

There has been some lively discussion in the media during the past week about what looks like a leak from Downing Street suggesting that taxes will be raised in the Autumn Budget to pay for the costs of coronavirus and the impact of the associated recession.   Most of the discussion has been about the politics. Here we try to look through the politics and focus on the economics.  …

GDP could stand £70 billion higher when the schools reopen but part of the swing will be exaggerated by measurement issues

August 31, 2020

There are quite a lot of different impacts on the economy that are likely to follow from the reopening of schools next month. The most recent GDP figures show the education sector as one of the most affected of all sectors of the economy even though the figures are somewhat misleading because they do not take home schooling into account. In addition, parents who are home schooling have less time…

UK GDP saw a record decline in Q2 – but how much of it can be explained by how we measure public sector output?

August 24, 2020

This month saw the release of Q2 GDP data for most eurozone countries as well as the UK and the US. The picture was one of record contractions in output in most countries. Only in a few cases shown in Figure 1, such as Lithuania and Finland, could the annual fall in Q2 GDP be kept at or below 5%. Double-digit falls were the norm with 13 countries out of…

The Times – Sunak’s Eat Out to Help Out scheme boosts ailing hospitality sector

August 17, 2020

The number of people dining out during the week has surged this month since the introduction of Eat Out to Help Out, bringing in hundreds of millions of pounds for Britain’s suffering hospitality sector.   The scheme has given the country “a much-needed boost towards normality”, according to the Centre for Economics and Business Research.   The think tank estimates that shops, pubs and restaurants in London missed out on £600 million…