Over the past year, the British economy has been yo-yo with the government’s pandemic restrictions. On Monday, the next bounce began when shops, outdoor dining, gyms and hairdressers reopened across England for the first time in months.
In London, friends gathered at tables outside a bar at one minute after midnight to toast the reopening. Others lined up in light flags at 7 a.m. for shops to open their doors. Hairdressers and beauty salons had long queues, and by lunch the tables outside at restaurants were full.
But the pandemic left Britain with deep economic wounds that shattered historical records: the worst recession in three centuries and record levels of wartime borrowing.
The reopening exposed the businesses that did not survive the multiple closures and whose windows were fixed well forever. Some of the shutters used to be style decorators, such as the Topshop in Oxford Street, one of Europe’s busiest shopping streets. Many neighborhood restaurants are now darkened, empty shells.
Last March and April, when the coronavirus spread rapidly through Britain, there was an economic downturn unlike anything never seen before, as schools, workplaces and businesses suddenly closed. Then a summer boom, when the restrictions eased and the government helped people lead their homes with a popular meal discount initiative called ‘Eat Out to Help Out’.
From the autumn, the second pandemic halted the recovery, although the economic impact was not as severe as last year. Yet the government is spending about 344 billion pounds, or $ 471 billion, on its pandemic response. To pay for it, he borrowed a record amount and planned the first increase in corporate tax since 1974 to help balance the budget.
The Bank of England predicts by the end of the year that the size of the UK economy will be back to where it was at the end of 2019. “The economy is like a winding source,” Andy Haldane, the central bank’s chief economist, said in February. “Since his energy is released, the recovery must be one to remember after a year to forget.”
Although many retail spending has shifted online, reopening store doors will make a big difference for many businesses. Foot traffic across Britain’s retail premises on Monday was more than double that of last week, according to data from Springboard.
Daunt Books, a small chain of independent bookstores, was preparing to reopen last week. During the shutdown, a skeleton crew “worked harder than they had ever worked, just to keep a drop” of revenue from online and phone orders, said Brett Wolstencroft, the bookseller’s manager.
“The worst moment for us was December,” he said. Wolstencroft said when stores in large parts of the country were closed from December 20th. The income of one day in the run-up to Christmas is similar to the value of a week during the rest of the year. “It’s extremely hard to realize you’re losing your last bit of Christmas.”
He looks forward to getting customers back to flip through the shelves and talk to the staff. “We would have turned ourselves into a warehouse,” he said, “but it does not work for a good bookstore.”
On Monday afternoon, Daunt’s flagship store in central London was busy without being crowded. Children’s books have been particularly popular so far that day, said Mr. Wolstencroft said. All its stores, even the one in the City of London, surrounded by largely empty office buildings, are performing better than expected, he said. The booksellers were back to do what they do best: make recommendations. One customer who was looking for a novel about London for a German friend was quickly brought to the corner where the books of British author Zadie Smith were.
With pubs, hairdressers, cinemas and hotels closed for months on end, Britons are expected to build up £ 180 billion in excessive savings by June, according to estimates by the Office of Budgetary Responsibility. The money is expected to be the car of recovery as soon as people move out more, although economists are debating how much of it will end up in the coffers of businesses. Some predict just 5 percent and say medium- and high-income households are more likely to keep their savings.
Britain’s official unemployment rate has remained relatively low due to the government’s wage support initiative, which provided up to 80 per cent of workers’ salaries when restrictions could no longer work. Eventually, there were about six million people, or a fifth of the workforce, going on.
Monday was just one phase of the reopening. Bars can only serve customers in outdoor seating areas, and less than half have such amenities. Hotels will also be closed for at least another month, along with indoor eateries, museums and theaters. The next reopening phase is scheduled for May 17.
Overall, two-fifths of hospitality businesses have outside space, said Kate Nicholls, CEO of UK Hospitality, a trade group.
“Monday is really a positive start,” she said. “It helps us to gradually reopen businesses, gradually get staff back on track and build up for the real reopening of hospitality that will be on May 17.”