COVID-19 against the economy

3 mins. reading time

After the World Health Organisation declared a global health emergency at the end of January, nations began to prepare for social distancing, increased hospital intakes and ultimately the slowdown of the economy.

The key message in the UK has been to ‘stay home, save lives, protect the NHS’, and this has had a paramount impact on our economy. Where pharmaceutical companies are embracing and prospering during these unprecedented times, non-essential and small businesses are hugely suffering due to the UK lockdown and therefore lack of access to these businesses. Whilst this is crucial to save as many people who have contracted coronavirus as possible, many sectors excluding healthcare have been negatively hit by the key message for the public to stay at home. Organisations who are still in their early growth stages may not have the financial backing to develop an omni channel distribution method and therefore will be hugely knocked by the lack of sales they will receive as their physical stores have had to close.

The Bank of England have also lowered their interest rates to the lowest they have ever been, to 0.1%. This clearly impacts businesses as the cost of borrowing and loans will decrease and therefore make their costs more manageable in a time where most businesses are suffering, individuals with variable rate mortgages will also benefit from a slight reduction in their housing costs. However, on the other hand, the value of savings and incentive to save cripples for individuals and businesses alike.

The combination of both staying home as well as reduced income has only accelerated the speed that the high street is crumbling and people have been encouraged to turn e-commerce and interacting with businesses online.

It is unlikely that the UK’s economy will go back to ‘normal’ anytime soon, but in the meantime, the British public can play their part by helping small businesses to survive.