A THIRD of hotel and food businesses had ‘no or low’ confidence they would survive to next year even BEFORE the national lockdown was declared
- Official survey shows accommodation and food industry huge hit from lockdown
- A third of businesses had ‘no or low’ confidence that they will survive the year
- Gloomy assessment came even before the latest national lockdown announced
A third of accommodation and food services businesses had ‘low or no’ confidence they would survive until the end of the year – even before the national lockdown was declared.
The alarming findings emerged in the latest official survey on the impacts of the coronavirus pandemic on the economy and society.
A swathe of hospitality firms are facing disaster after Boris Johnson imposed a month-long squeeze in England from today to control a surge in infections.
But according to the Office for National Statistics research, the picture was already grim even before the restrictions emerged.
The UK-wide survey found between October 5 and 18 just 75 per cent of accommodation and food service businesses were trading, compared with 85 per cent across all industries.
Some 32 per cent of accommodation and food services businesses had no or low confidence that their businesses would survive the next three months
GDP is now predicted to be 11 per cent lower this year in real terms
It also had the highest percentage of companies with no cash reserves, at 6 per cent.
Some 32 per cent had no or low confidence that their businesses would survive the next three months.
Of businesses not permanently stopped trading, 17 per cent intended to use increased homeworking as a permanent business model in the future.
The Bank of England pumped another £150billion into the economy as lockdown began today – amid fears that it will send GDP plummeting and destroy jobs.
The Bank has increased its mammoth bond-buying programme to £895billion, warning that UK plc’s recovery was already ‘softening’ before the squeeze was announced on Saturday. Interest rates are being kept on hold at the record low of 0.1 per cent.
The economy is projected to shrink by 2 per cent between October and December, but the Monetary Policy Committee says the UK is likely to dodge a double-dip recession.
GDP is now predicted to be 11 per cent lower this year in real terms, worse than the 9.5 per cent it suggested in August. The Bank’s central expectation is that the economy will not regain its level from last year until the start of 2022.
The MPC said unemployment is set to peak at 7.75 per cent in the second quarter of next year – with government bailouts pushing back the worst of the impact from the 7.5 per cent high the Bank had anticipated in this quarter. The current rate is 4.5 per cent, suggesting another million people face losing their jobs.
An 11 per cent contraction in GDP this year would be the worst for 300 years – eclipsing the downturn sparked by the First World War and Spanish Flu
An eye-watering 5.5million are set to be on furlough this month, according to the report – with 2.5million still needing the support schemes until April.
Speaking at a press conference after announcing the move, Bank governor Andrew Bailey said: ‘We are here to do everything we can to support the people of this country – and we’ll do it and will do it quickly.’
The grim assessment comes as Rishi Sunak prepares to set out the Government’s business support package for the second national lockdown, admitting it will have ‘significant additional impacts’ on the economy.
Mr Sunak is set to announce that the 80 per cent furlough scheme will continue beyond December 2 in any area of the UK that faces Tier 3 restrictions.