UK faces ‘catastrophe’ fist risk from coronavirus and Brexit

UK coronavirus covid 19 pandemic response boris johnson cummings lockdown robertson pkg intl ldn vpx_00004009
British Industry Confederation, representing 190,000 British companies, said on Thursday that businesses are coronavirus pandemic he beat up his cash reserves and struggle to survive.

UK and EU officials are trying to adopt new trading conditions after Brexit came into force in January, but progress has been painfully slowed down and time is running out to prevent a break when transition regulations expire at the end of 2020.

“The flexibility of British trade is definitely on the ground,” said CBI general manager Carolyn Fairbairn. BBC. “Every stored cash, all prepared stocks are exhausted. The companies I spoke to didn’t have time to plan Brexit at the end of the year.” “One by one [CBI] The member put it on me – just because of the burning of the house, it is OK to fire at the garden hut. “

British companies have already borrowed £ 35 billion ($ 44.4 billion) in government coronavirus aid programs, according to figures released by the British Treasury on Tuesday. And about 9 million people – about 27% of the workforce – rely on the state to pay all or part of their salary at £ 19.6 billion ($ 22.2 billion) so far.

Britain worst economic collapse More than 300 years Due to the pandemic, even if it is running towards its own imposed deadline to conclude a trade agreement with the European Union, the only major export market.
Big companies in the UK are already 75,000 layoffsAs more and more partial deadlocks and social withdrawal continue, more is coming. UK energy company Centrica (CPYYY) In a statement Thursday, he mostly cut 5,000 jobs by the end of 2020, and bombardier (BDRAF) He confirmed that 400 jobs will go to his operation in Northern Ireland. Smaller companies also crash, leading to hundreds of thousands of job losses.

According to the Organization for Economic Cooperation and Development, unemployment could rise to 15% in the fourth quarter if there is a second coronavirus outbreak.

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The Paris-based agency said on Wednesday that the UK economy expects to shrink by 11.5% this year, even if a basic free trade agreement with the European Union is reached and a second wave of infections is avoided.

This is the worst projected contraction among the major economies. If infections rise again and stricter social removal measures are reintroduced, GDP may collapse by 14%.

A souvenir shop off London Oxford Street.
Those most at risk are companies in the hospitality and travel industries. Many restaurants and pubs fear that they will not surviveeven if it is allowed to reopen as planned next month due to social withdrawal rules.

Cabinet ministers are now lobbying for the UK’s two-meter social distance rule to be reduced to one meter, according to the World Health Organization’s guidance, according to a government source on controversy. This will be very important for the reopening of bars, restaurants and theaters and for the public transport to work.

Travel and tourism businesses furious about the impact of new quarantine rules International developments, introduced on Monday, must isolate themselves for two weeks. Europe’s largest airport, London Heathrow, said Thursday Protecting frontline jobs is “no longer sustainable” since it reported a 97% drop in passenger numbers in May compared to the same month last year. Management has already reduced their business by a third.

According to the World Travel and Tourism Council, it is responsible for about 4 million UK jobs or 11% of the workforce and 9% of UK GDP in 2019. He estimated that 1.2 million of these jobs could be lost in 2020 due to the epidemic.

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Brexit deadline machines

Considering that an uncontested Brexit will cause an economy on its knees, there may be no other option than to extend the duration of the UK trade talks. It’s by the end of this month to make such a request. Prime Minister Boris Johnson said he didn’t want to do this all the time.

However, the negotiations did not go well and became even more complicated by the pandemic, which forces negotiators to trust. video conferencing. European Union chief Brexit negotiator Michel Barnier said there has been “no major progress” since the negotiations started last week and that Britain continues to step back in previous commitments.
The UK's largest companies cut tens of thousands of jobs. Millions more are at risk

British Brexit chief negotiator David Frost said in a statement that “progress was limited”, but insisted that the talks were “in a positive direction”.

“If we have a political time scale that takes us to a brinkmanship deal that will bring disaster for the British business in December, they won’t be ready,” according to Fairbairn.

CBI submitted proposals for a “business-rich economic recovery” in a letter to Johnson on Thursday. The group called on the government to prioritize skills development for young people, invest in the green economy and directly encourage those who focus on small businesses and high growth sectors.

OECD expects unemployment to reach 7.2% in the UK by the end of 2021, even if a second wave of infections is avoided and a trade agreement with the European Union comes into force. This is compared to 3.9% at the end of the first quarter of this year.

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Charles Riley, Julia Horowitz, Luke McGee, Chris Liakos and Sebastian Shukla contributed to this report.

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