ONS releases report on how Britain’s economy has been affected by coronavirus

ONS releases report on how Britain’s economy has been affected by coronavirus

The Office for National Statistics (ONS) is the UK’s largest independent producer of official statistics and the recognised national statistical institute of the UK.

In light of recent developments, ONS has released a comprehensive report about how the British economy has been impacted by the outbreak so far.

Four of the most prominent and shocking points were:

  1. Almost half of companies were suffering before the lockdown

Of the 4,000 companies the ONS spoke to, 45% said their takings were substantially below normal between 9 and 22 March; almost all attributed that to the fallout from Covid-19.

And they were responding largely before Prime Minister Boris Johnson announced the enhanced restrictions on movement and closure of non-essential businesses, including gyms, hairdressers, cinemas and pubs on 23 March.

So, the next set of figures are likely to show a big rise in the level of suffering. Economists are warning that activity could have dipped by as much as 15% across the quarter.

  1. Over a quarter of firms were intending to lay off staff temporarily

Again, this was largely ahead of the closure of non-essential businesses and the announcement of the government’s Job Retention Scheme. The scheme allows organisations to furlough staff who were on the payroll up to the 28 February (even if they were laid off or left subsequently), with the government covering up to 80% of salaries.

So again, the numbers will have risen since – probably sharply.

Other figures have shown that the number applying for universal credit, many of whom will have been self-employed, have risen by 950,000 in just two weeks.

Even with the furlough scheme, some economists say the UK unemployment rate could double to 8% this year.

  1. The cost of cold and flu remedies has shot up

As the demand for hand sanitiser, soap, and loo rolls, soared, so too did concerns of excessive price mark-ups. The Competition and Markets Authority even set up a coronavirus task force to deter price gouging.

The ONS said that almost 70% of businesses reported that prices of their products were unchanged. Only 12% admitted to raising prices but in many cases this was due to problems with getting hold of supplies.

The ONS has also zoned in on some of the current must-haves, monitoring the price of items from toilet rolls to vitamin C online.

It found that cold and flu remedies were 10.7% more expensive in the last week of March than in the previous week. This is on top of reports of price rises earlier in the month which pharmaceutical companies have blamed on rising demand and a scarcity of raw materials.

  1. Many firms that export or import have had supply chain issues

Roughly six out of ten of the firms the ONS heard from neither import or export.

But of those that do, more than half reported disruption. This is presumably down to interrupted production around the globe – perhaps inevitably in the face of movement restrictions, shuttered factories and offices and depleted workforces.

The ONS survey doesn’t reveal the extent of the disruption – it may just a be a slight delay.

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