Kate Andrews

The theory behind a V-shaped recovery relied on the assumption that the economy would open up almost as quickly as it shut down. This did not happen. The UK moved at a much slower pace than its European counterparts exiting stringent lockdown measures. And already restrictions are being implemented again. August's GDP figures were surprisingly dismal, and now all future monthly updates for economic growth will be affected by a longer list of restrictions that are bound to impact recovery. As a result, scenarios for the UK’s economic recovery are being revised to reflect this. In the last day, we’ve had two updates: one from the IFS’s Green Budget (in association with Citi), the other from Capital Economics.

Unemployment is creeping up. For months it remained stagnant, as the combination of the furlough scheme and people keeping out of the jobs market kept the rate deceptively low. But over the past few months, it has started to increase, with today’s labour market overview from the Office for National Statistics revealing a 4.5 per cent unemployment rate — the highest level in three years. There’s a sliver of hope in today’s data, which shows job vacancies are up Still, at first glance you’d expect the unemployment rate to be much worse. After the largest economic contraction in three hundred years, an increase from 3.9 per cent at the start of the year to 4.5 per cent now would give the impression we’ve avoided catastrophe.

August should have been a relative boom for the British economy: restrictions were the most relaxed since the Covid crisis began. Businesses in the hospitality and leisure industries were largely allowed to reopen by this point, and public transport guidance changed to allow non-essential workers to return to the office. On top of these liberalisations, schemes like Eat Out to Help Out were brought in to encourage – even subsidise – more economic activity. Yet growth figures fell flat, increasing by 2.1 per cent – roughly half of what was expected by economists. It appears economic recovery started to stagnate (down from June’s 9.1 per cent and July’s 6.4 per cent) in a month that was primed for growth.

How popular are circuit breakers? The latest Covid-19 news from Ireland would suggest support varies dramatically between the scientists and politicians. Speaking on RTE, Leo Varadkar revealed the National Public Health Emergency Team had recommended moving to ‘level 5’, which would have amounted to a ‘circuit break’ and another shutdown of the Irish economy. Pushing back, Varadkar told the national broadcaster that outstanding questions about the effectiveness of a temporary shutdown could not be answered to his satisfaction: ‘We didn’t feel it had been thought through properly. For example, we asked for some comfort that four weeks might be enough… They weren’t able to give us that comfort.

When Rishi Sunak was appointed Chancellor in February, he must never have imagined that his first address to the Conservative party conference would be made to an empty room. Nor would he have expected to have his entire speech dominated by a pandemic. Yet in his short, direct address, Sunak barely strayed from Covid-19. He reminded the public of the government's vast interventions to curb the impact of the virus — and hinted at what steps might be taken in future as the Treasury deals with the aftermath of our six month spending spree.

Cineworld is to close its 128 cinemas - saying that the Covid restrictions have made its business "unviable". It's terrible to see that word applied to the cinema industry - and even worse to think of the 5,500 jobs this will impact. But the truth is that many businesses can’t survive what will be a year’s worth of restrictions - based on PM’s timeline where he's talking about some kind of scientific breakthrough by Easter. The final straw for Cineworld was the delay of the new 007 film No Time to Die, now due out next April on the logic that this would maximise takings.  https://twitter.com/007/status/1312122931879632897?

We are frequently reminded of polls that show the majority of Brits supporting lockdown measures. In fact, often the public wants the government to go further than it has done. Local officials tend to reflect this sentiment. Mayors of two of the UK’s largest cities — London's Sadiq Khan and Manchester's Andy Burnham — have repeatedly accused the government of not going far enough with its Covid restrictions. But are attitudes starting to shift? While there’s little data available about the public’s adherence to Covid rules, some evidence is starting to build. A comprehensive study from UCL and Kings College London found that only a fraction of people who said they would self-isolate if required have actually done so.

It’s rather difficult to dissect or analyze policy areas from last night’s horrendous debate. But Freddy Gray and I attempt to do so on the latest episode of his Americano podcast — and considering today’s economic updates, I’ll give it another go.Even in a debate that spent most of its time in the gutter, both President Trump and former vice president Joe Biden had moments of cut-through. For Biden, his call for unity in America felt like a rare throwback to a form of traditional campaigning that tends to play well with watchers at home. For Trump, his most persuasive moments came early in the debate, when he was speaking about the economy.

When Chancellor Rishi Sunak extended the furlough scheme back in May, he committed more support than anyone expected. In June and July, the government continued to pay 80 per cent of employee wages (with a cap of £2,500 per month) and has also picked up the majority of the tab in August and September.  But as the scheme comes to an end after 31 October, calls have grown louder for it to be extended again. So far Sunak has been adamant that it won’t be, telling the House of Commons in July that it could not continue forever. But, as with many Covid-19 policies over the past six months, it appears this may be about to change.The Treasury is working on proposals to extend subsidies for workers’ wages, according to reports in the Financial Times.