The Centre for Economics and Business Research (CEBR) said COVID-19 was the main cause of the $348 billion drop in the value of UK goods and services over the past year.
Forecasters warn that not fully opening up the economy could cost upwards of $76 million a day.
“In the entertainment sector, earnings are still way below where they were pre-pandemic,” said Vicky Pryce, chief economic adviser at the CEBR. “Hospitality has suffered and the concern is that unless they have a period of solid growth over the next few months, they won’t be able to recoup all the losses they have made over the period of closures that we’ve seen.”
Big government intervention has meant a year of unprecedented Treasury spending – with the Bank of England printing money to pay for it. The true cost may be yet to come, when wage subsidies and business support schemes wind down.
“Looking at what businesses need to survive and not go under is absolutely the priority because the environment is still pretty fragile and we’ve seen what’s happening also on the export front – on top of that, there is Brexit, which is adding to the uncertainty,” Pryce said.
“I think it’s going to be a pretty tough period to get the balance right for the government.”
That is why many pubs, restaurants and retailers are keeping certain restrictions in place, from mask-wearing to creating social distancing zones, so customers and staff feel safe.
“There is a concern that the bounce-back we have seen for the consumer in recent months might fizzle out because people will be more worried about the likelihood of catching the disease again,” said Pryce.
“If that is the case, then it will definitely slow down the recovery.”
The UK government hopes a consumer spending splurge will kick-start it all. But it will be a long time before the economy is back to anything like it was.