Economic Review – September 2020

Posted on 06 October, 2020


Chancellor Rishi Sunak has set out a series of revamped measures designed to halt job losses and stem business failures as part of his Winter Economy Plan. Mr Sunak’s statement, delivered in the House of Commons on 24 September, was a last-minute replacement for the planned Autumn Budget which the Treasury had cancelled the previous day. That decision was taken in order to focus efforts on dealing with the short-term economic problems caused by the tightening of coronavirus restrictions. The centrepiece of the Winter Economy Plan was a new scheme to replace furlough, which will run from 1 November. The Job Support Scheme will last for six months and see government subsidise the pay of employees who work at least a third of their normal hours. Under the scheme, employers will pay employees for hours they actually work, with government and the employer each covering a third of the hours staff can’t work…..


Although the latest gross domestic product (GDP) statistics confirm the UK economy staged a recovery over the summer months, there are growing fears that tighter coronavirus restrictions will inevitably hit future growth prospects. Official data released by the Office for National Statistics (ONS) showed the UK economy grew by 6.6% in July. While this was the third consecutive month of expansion, July’s rate of increase was slower than the 8.7% figure recorded in June. Despite the recovery, output remains considerably below pre-coronavirus levels. Indeed, ONS Director of Economic Statistics Darren Morgan cautioned: “While it has continued steadily on the path towards recovery, the UK economy still has to make up nearly half of the GDP lost since the start of the pandemic.”….


Discussions surrounding the potential effectiveness of subzero interest rates continued last month as the BoE made it clear it is not ruling them out….

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