Absenteeism caused by Covid-19 isolation and staff shortages could result in a £35 billion loss in output over January and February — equivalent to 8.8 per cent of gross domestic product (GDP) for those two months.
The analysis for The Sunday Times by the Centre for Economics and Business Research (CEBR) is based on government planning assumptions of a 25 per cent absenteeism rate.
A more conservative estimate of 8 per cent — three times the seasonal average — would result in loss in output across January and February of £10.2 billion, or 2.6 per cent of GDP, the CEBR said.
“Even with only a peak of 8 per cent, there will be an economic cost,” said Pushpin Singh, economist at the CEBR. “Nonetheless, we would expect that most of this would be made up during the rest of the year.”
His estimates take into account that about half the population is working from home as a result of the “plan B” restrictions implemented in England by Boris Johnson last month.
Concerns about the impact of Omicron on the economy come as data on Friday is expected to show that GDP rose 0.4 per cent in November, the month before the new variant sparked the plan B coronavirus requirements.