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Economists and epidemiologists are increasingly confident that the UK’s economic recovery will be able to withstand a fall spike in coronavirus cases as the school year begins, workers return to offices and people socialize more at school. interior.
With Covid-19 vaccines still proving to be widely effective in limiting serious illness, expert opinion suggests that while a new wave may slow gross domestic product growth, it was unlikely to reverse it as she did it last winter.
The economies of most advanced countries are adjusting to the virus much better, while public health experts believe a severe lockdown is unlikely to be necessary, even though the number of cases is likely to increase dramatically.
Evidence from many countries at the start of the pandemic showed that the higher the prevalence of the coronavirus, the more economic conditions tended to deteriorate.
In a new article for VoxEU, a policy analysis portal, Jean-Charles Bricongne and Baptiste Meunier, economists at the Banque de France, found that internationally, “even without lockdown, pandemics are affecting the economic activity through voluntary social distancing ”.
UK data matches this. In July, economic performance deteriorated as the Delta wave intensified and consumers stayed at home. Retail sales fell 2.5% in July on a month-over-month basis as households showed little desire to increase their borrowing and put money in bank deposits.
Steffan Ball, UK chief economist at Goldman Sachs, said: “We have seen a slower-than-expected recovery in some Covid-sensitive sectors including arts and entertainment and transport.”
But new evidence suggests that as the number of cases declined and school vacations began, consumers became more willing to spend, eat out and visit malls in August.
Samuel Tombs, a UK economist at consultancy Pantheon Macroeconomics, however, suggested there was reason to be cautious this fall. “Unless attitudes change, households will respond to the increasing chances of catching Covid-19 by visiting service providers less often in the fourth quarter.”
Many sectors have also been affected by the fragility of their supply chains, limiting the speed of the recovery.
But he added that the clear link between the cases and economic performance was likely to become more nuanced. He stressed the relaxation of rules to allow close contacts of double vaccinated positive cases to avoid self-isolation; the fact that companies have been able to simplify online commerce; the likelihood of increased business investment; and the government’s recall jab program which he said would bolster consumer confidence.
Yael Selfin, UK chief economist at consulting firm KPMG, was more optimistic. She said she expected consumer caution to wane even with an expected rise in the virus in the fall.
“As long as the schools are still functioning, only physical retail outlets, restaurants and hotels are affected by a new wave. A lot of consumers were hesitant to go out in the summer because they didn’t want to catch anything that might stop their vacation and that won’t be a problem in the fall, ”said Selfin.
A major driver of economic activity will be whether hospitalizations can be kept at a level that does not require further restrictions in the fall. Scientists and public health experts are cautiously optimistic about this, but they do not overlook the need to reintroduce lighter measures as winter pressures on health services increase.
“In the summer, the pressure on health care is lower, children are out of school and mix less, and people socialize more outdoors,” said Steven Riley, professor of infectious disease dynamics at the ‘Imperial College London. “It all changed during the winter.
In Scotland, the reopening of schools in mid-August brought the number of cases to more than 7,000 per day for the first time. Weekly case rates among 15-19 year olds peaked at just over 2,000 cases per 100,000, but are now declining, while rates among children 14 and under continue to rise, reaching 1 300 cases per 100,000 in the past week.
As a result, Scottish hospitals are starting to be strained. In the week to August 31, 675 patients were admitted with Covid-19, an increase of 65% from the previous week.
On Monday, the number of daily cases across the UK rose to 41,192, from 26,476 on the same day last week, as many schools in England, Wales and Northern Ireland tested the pupils before the start of the term. Hospitalization and death rates, however, remained stable.
Linda Bauld, professor of public health at the University of Edinburgh and the Scottish Government’s new senior social policy adviser, expects politicians to have to choose between turning off parts of the health services and turning off parts of the ‘economy.
“It is a political choice and I suspect the choice will be to maintain the economy and bear the brunt of additional hospitalizations,” she said, adding that shorter hospital stays in any future wave of the pandemic would reduce pressure on health services.
Liam Smeeth, epidemiologist and newly appointed director of the London School of Hygiene and Tropical Medicine, said a similar wave of infections would hit England soon as well.
“We will see an increase in cases – there is no doubt about it – but what matters with Covid is who gets really sick,” he said. “I would be surprised if we were to shut down as completely as we did last winter.”
But he added that it was possible that the government would end up “re-emphasizing” the need to wear a mask indoors and that people would avoid going to the hospital except in cases of emergency. absolute necessity.
Smeeth pointed out that regardless of official restrictions, many people would continue to modify their own behavior to reduce the risk of infection, such as working from home if possible and shopping online rather than shopping.
Additional reporting by Clive Cookson and Valentina Romei
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