Impacts Of The Second Lockdown On UK’s Economy

Just a few months after normalcy was restored in the UK, Covid-19 numbers have started to rise again. Prime Minister Boris Johnson will continue setting out new national lockdown restrictions as the government tries to control the spread of coronavirus. Some of the restrictions expected to be announced include working from home and early closure of pubs.

Stock Market Impact

Impacts of the looming lockdown can already be felt in the stock market, with the most affected sectors being tourism and hospitality.

Shares in pub chains, hotel groups, and airlines have drastically dropped since then. IAG of British Airways, was the biggest loser on the FTSE 100, down by nearly 15%, followed by Easy Jet, which fell by 9%. Roll-Royce also saw a 5% drop.

The hospitality sector remains the most affected due to the Covid-19 precautionary measures. A large number of licensed premises are still closed after the first lockdown, and with a second one on the way, business owners are not sure if they will survive this storm.

Shares in UK’s leading pub companies have fallen to their lowest level in six months.

Mitchells & Butler, as well as Marstons, are down by 15% while JD Weatherspoons has seen a drop of 9%. As it stands, FTSE 100 has suffered a loss of 51 billion pounds due to the lockdown fears.

Safety

Although public safety is of the utmost importance, business owners are asking the government to consider reformulating the potential lockdown restrictions to minimise their damage to businesses.

Emma McClarkin of the British Beer and Pubs Association said that they recognise and support the government’s effort to manage the risk of rising infections and will continue to do so.

However, she is worried that the new restrictions will push already struggling pubs to their breaking point. She asked that the government puts together a comprehensive support package to help support pubs all across the country.

Investors are starting to become fearful and are worried about the likelihood of London being roped in lockdown limitations. The government will therefore have to figure out how to contain the spread of coronavirus, all while supporting the economy.