It was always going to be a difficult week. The Monday warm up act was Sir Patrick Vallance and Chris Whitty. The Chief Medical advisers, were there to set the tone.
The rate of Covid infections is increasing. "If the current level of infection doubles every seven days, there will be 50,000 cases every day by mid October."
Continuance at the same rate would mean over one million infections per day by mid November. By Christmas, the whole population of the UK would have been infected. President Trump's concept of "Herd Mentality" achieved.
It was left to Ed Conway on Sky News to point out the current rate extrapolation would mean just 13,000 cases by the October hurdle date, not the 50,000 as claimed. Detail did not really matter. The stage was set for the Prime Minister to deliver the news of further lock down measures across the U.K.
Pubs and restaurants must close by 10.00 pm. Staff would be discouraged from returning to the office. Business conferences, exhibitions and large sporting events, would not be reopening as planned. Face masks must be worn. No more than fifteen can attend a wedding, thirty may continue to attend a funeral.
The measures were to last for six months. No reprieve for Christmas. London placed on a high risk list. Mayor Sadiq Khan warned, further lock down measures could be imposed in the capital.
The measures were a further blow to the hospitality and leisure sector and to an events business already on the floor. The hand over team were readying the stage for the Chancellor to ride to the rescue. The planned budget was scrapped. Rushi Sunak announced his "Winter Economic Plan".
Would the furlough scheme be extended as hoped? At a projected cost of £52 billion by the end of October, so what of a further £20 billion into Easter next year.
Official figures on Friday would reveal borrowing for the year to date had already reached £175 billion. The OBR forecast of £320 billion for the financial year well in reach.
The Chancellor's Winter plan revealed further extension of the VAT cut for the hospitality sector. Generous cash flow provisions were added for VAT and Loan repayments. The furlough scheme would come to an end as planned. The complex Job Support Scheme would be introduced. At best the jobs crisis may be postponed to the end of January.
"I cannot save every business, I cannot save every job" warned the Chancellor. Sector specialists warned of one million jobs lost in the hospitality sector and 300,000 in the events business. This week, Lord Wolfson, head of Next, warned of hundreds of thousands of job losses in the retail sector, as the online shift continued.
The unemployment rate is set to rise to over 8% by the end of the year. The number of people out of work could rise to three million by Christmas. In reality our forecasts for the current year have not changed much. Our hopes remain, for a positive bounce back next year ...
The Saturday Economist
John Ashcroft publishes the Saturday Economist. Join the mailing list for updates on the UK and World Economy.
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