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Bank of England: UK households to face £33 billion annual economic hit

Author : Pankaj Singh | Published Date : 2020-09-08 

Bank of England has reportedly stated that United Kingdom will face an £33 billion hit to the economy annually post COVID-19 outbreak.

Changes in people’s lifestyle due to the pandemic has resulted in structural shifts in the economy which can have a long term impact on the employment as well as GDP growth of the country, stated Bank of England’s governor Andrew Bailey.

According to the governor, the behavioral changes in people, such as being cautious before going out and inclination towards working from home will decrease the country’s GDP by 1.5% every year, which is lower than the predicted rate. The sum equates to over £1,200 per household on the basis of 2019 output.

If sources are to be believed, the loss in income is likely to be as a result of the mismatch in employee skills. After the pandemic, few industries like hospitality and retail are likely to witness huge job losses as compared to others. Whereas other sectors are estimated to face shortage of qualified applicants, which will further lead to an increase in unemployment rates and economic slowdown in the U.K.

Mr. Bailey also claimed that the structural changes is a matter of concern, considering these changes will lead to long term scars on the economy. He further added that it can result in high unemployment rates for long periods of time.

Dave Ramsden, Deputy Governor at Bank of England mentioned in a comment that the conditions are worse than estimated. He added that the next phase of recovery initiatives will give a clear idea about the scale of impact on the labor market and the level at which UK economy is recovering.

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About Author

Pankaj Singh

Pankaj Singh

Endowed with a post graduate degree in management and finance, Pankaj Singh has been a part of the online content domain for quite a while. Having worked previously as a U.K. insurance underwriter for two years, he now writes articles for fractovia.org and other online portals. He can be contacted at- [email protected] | https://twitter.com/PankajSingh2605

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