Coronavirus fears are taking a toll on Britain’s economy
BRITAIN’S ECONOMY contracted by 20% in the second quarter, according to figures released on August 12th by the Office for National Statistics, more than that of any other G7 country. Around 730,000 workers have lost their jobs since March when the coronavirus lockdown began; many more are sure to follow. Boris Johnson, the prime minister, has played down the dismal numbers, saying the economy will inevitably face “bumpy months ahead”. But Anneliese Dodds, the shadow chancellor, reckons that lingering fears of the virus—“people not feeling safe when they go into premises”—are dragging the economy down.
There is some truth to this. Brits are indeed leaving the safety of their homes less than their European counterparts. According to Google’s “mobility” index, which tracks people’s movements using real-time data from their smartphones, British people are moving 3% less than they were at the start of the year. In Germany, by contrast, people are travelling 20% more, as you would expect in the summer, despite suffering similar infection rates (as measured by the latest seven-day moving average). In France, where recent covid-19 case numbers are markedly higher than in Britain, movement is up by 29%. At British workplaces, meanwhile, movement is 38% below its January-February baseline. In other big European countries, it is down by an average of 27% (see chart).
Surveys of British workers show a similar trend. In mid-July Morgan Stanley, a bank, polled 12,500 workers in Britain, France, Germany, Italy and Spain. They found that only a third of British professionals had returned to their offices, compared with around three-quarters of those on the continent. Compared with the residents of other European cities, London’s workers are more likely still to be working remotely (see chart).
The reason for this greater nervousness among Britons is not clear. It may be related to the severity of the country’s outbreak, which has claimed more than 46,000 lives—more than any other European country. Distrust of the government could also be a factor: a survey released this week by Kantar, a research firm, found that 43% of British respondents disapprove of the government’s handling of the pandemic, compared with 29% globally. Whatever the reason, until the British worker is confident enough to board a bus or train, or grab a coffee with co-workers in the kitchen, the economy will continue to suffer.
Author: | Post link: https://www.economist.com/graphic-detail/2020/08/12/coronavirus-fears-are-taking-a-toll-on-britains-economy
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