Table of Contents
Economic Overview
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- Economic growth was slow, even before COVID-19 hit
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- Figure 1: Quarter-on-quarter change in GDP, Q2 2015 - Q 2 2020 (% change)
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- Figure 2: Quarterly GDP, two quarter rolling average, Q2 2015 - Q4 2019 (% change)
- COVID-19 and the UK economy
- The OBR forecasts a double-digit decline in GDP in 2020
- Interest rates on hold till significant progress towards recovery is made
- Eat Out to Help Out scheme prompted a drop in inflation in August
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- Figure 3: Consumer price index, August 2019 – August 2020 (% change)
- Depth of real earnings slide correlates with impact of COVID-19
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- Figure 4: Real regular pay, three-month average, April 2019 to June 2020 (% annual change)
- Employment rate softens despite job retention schemes staving off unemployment
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- Figure 5: Total number of people temporarily away from paid work, seasonally adjusted, Q1 W1 – Q2 W13 2020 (thousands of people)
Business Health
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- Accommodations, food services and leisure most impacted by COVID-19
- Adoption of digital platforms to deliver services could be translated into improved profitability
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- Figure 6: UK Business Turnover, 2019, at the start of the year, by business sector (£million)
- Bankruptcies continue to decline as government measures pause insolvency procedures
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- Figure 7: Underlying company insolvencies in England and Wales, Q4 2017 – Q2 2020 (number of insolvencies)
- Negative profitability trend to continue as COVID-19 limits revenue growth in Q2 2020
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- Figure 8: UK PNFCs net rate of return, Q4 2017 – Q1 2020 (% return)
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- Figure 9: UK business investment excl. exceptional transfers, seasonally adjusted, 2010 – 2019 (annual % change)
- Figure 10: UK business investment excl. exceptional transfers, seasonally adjusted, Q2 2015 – Q2 2020 (£ billion)
Special Focus: Services
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- Impact of COVID-19 on UK services
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- Figure 11: Impact of COVID-19 on businesses by industry, 27 July – 9 August 2020 (% of respondents)
- Conferencing and events
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- Figure 12: UK conferencing and events market forecast, 2019-25 (£ billion)
- Retail and ecommerce
- Revenue collapse in retail will have secondary economic effects
- Effect on commercial retail property
- Effect on courier and express delivery
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- Figure 13: UK courier and express delivery market forecast, pre- and post-COVID-19, 2019-24 (£ billion)
- Legal services
- COVID-19 will encourage growth of regional hubs
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- Figure 14: UK Legal services Market forecast 2019-24 (£ billion)
- Social distancing will drive the maturation and adoption of ‘Lawtech’
What’s Next?
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- The end of the office?
- Flexible workspaces
- COVID-19 proofing offices
- End of Withdrawal Agreement could threaten service exports without a trade deal
- Trade in services
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- Figure 15: UK trade in services by continent excl. travel, transport and banking, 2015-18 (£ billion)
Appendix – Data Sources, Abbreviations and Supporting Information
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- Abbreviations
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