New U.K. Covid Restrictions Cost the Economy $2.6 Billion Per Month
December 9, 2021
After rolling back most of the nation’s Covid restrictions over the summer, the U.K. government has announced new restrictions aimed at stopping the spread of the Omicron variant.
The “Plan B” measures include mandatory mask-wearing in most indoor businesses, requiring proof of vaccination or a recent negative test for access to high-capacity businesses like nightclubs and concert venues, and broad guidance urging people to work from home if possible.
Bloomberg Economics estimates that the restrictions could cost the economy as much as 2 billion pounds ($2.6 billion) a month.
The U.K.’s economic recovery has lagged most other developed nations, and the new restrictions present additional headwinds to an economy already struggling with high inflation and a labor shortage. Following reports of the new restrictions, the pound plunged to the lowest level in 2021.
Trade organizations and business groups were quick to criticize the initiative, arguing that the efforts risk derailing the nation’s economic recovery, and called for additional government support to help impacted businesses. Bloomberg economists argue that the plan will likely be a drag on retail and hospitality spending as offices empty and consumers avoid shops. Based on data from the last time a work-from-home advisory was issued, Bloomberg estimates the call could lead to a 0.7% economic contraction in December.