Cutting the Covid self-isolation period from seven days to five would save the economy £300m in lost output in January, economists have estimated, as businesses are crippled by hundreds of thousands of absent workers.
Current rules could cost the economy almost £1bn next month as Covid infections soar, according to the Centre for Economics and Business Research (CEBR) – equal to a 0.5pc hit to monthly GDP.
It comes as Boris Johnson faces growing pressure to protect businesses and the NHS from the impact of mass staff absence as evidence grows that the dominant omicron variant is milder than previous forms of coronavirus.
The CEBR scenario assumes that daily cases average 110,000 in the first week of January and then decline by 20pc each subsequent week.
Karl Thompson, an economist at the think tank, said that reducing the period to five days would lessen the impact of the rules by £300m and limit the monthly GDP hit to 0.3pc.
It would also benefit hospitality businesses, which suffered from much lower Christmas sales than hoped for and now have to contend with legions of workers in isolation.