As we now enter into the 7th week of lock down restrictions, attention has begun to turn towards the strategy for lifting these measures, when they may be lifted and what things may look like afterwards.
We’ll take a look at the measures being taken by other European countries and how that’s likely to influence the UK, and when we might see the lifting of these measures.
More importantly how we feel that this is likely to impact the economy and the longer-term view of how society is likely to operate through to the end of the year and into early next year.
For what has felt nothing short of a lifetime, we’ve been waiting patiently in our houses, outside of our workplaces, away from our businesses, for this to pass and it certainly now feels as though we’re approaching a time when we can start to consider the end of the beginning.
The first European nation to officially announce it was planning to lift some restrictions on everyday life was Austria, as they felt as though they had successfully reached a point where they had suppressed the disease enough to protect the public.
On the 14th April they announced that garden centres, DIY stores and small shops would be able to open but with strict rules on social distancing. Customers entering and shopping would always be required to keep a minimum distance of 2 metres.
Germany followed suit announcing that they would allow some smaller shops to open, and Italy announced the same.
In Austria, larger shops, shopping centres and hairdressers are due to reopen from 1st May, while restaurants and hotels could reopen from mid-May if health conditions allow, Austria’s chancellor has said. It is believed that Germany and other European nations will broadly follow a similar plan.
Meanwhile, European sports leagues have started to announce, one after the other, that the absolute earliest they will allow any sports events to take place will be August, but the reality appears to be some way away from that date.
What to expect, looking at the lessons of Europe, is that business and the economy will gradually start to return to some form of normality from mid-May, but with strict distancing measures in place.
Governments across the world will strictly monitor the spread of new infections for COVID-19 in this period, potentially re-applying measures at certain times if new infections start to rise again.
The last businesses to re-open will likely be theatres, restaurants, bars and pubs, and this seems likely to happen later in the summer.
So far, whilst the economic impact has been pronounced (GDP has dipped significantly) it’s widely expected that this will be a V-shaped and temporary mini-recession of types. The UK has, so far, managed to avoid the kinds of unemployed numbers that have been coming from America, with up to 20% unemployment not outside the realms of possibility.
With the government’s economic programme of support and stimulus, the FTSE 100 and the economy at large has broadly held firm. Whilst there has been a significant dip in economic activity this is, of course, expected. Boris Johnson, the Prime Minister, spoke on the doorstep of Downing Street of “firing up the engines of the economy” and with each engine we expect activity, confidence and growth will return.
Most of the statistics, forecasts and analysis of the British property market have spoken of a multi-billion pound, thriving market that has essentially been temporarily paused, almost as though cryogenically frozen in time waiting to be thawed and re-started.
Property transactions, business and activity is expected to return swiftly once restrictions are lifted due to the fact that the business itself would not require much adjustment to adhere to distancing rules, and so things would broadly return to normal fairly quickly.
In the next few weeks we’ll have to get used to a new normal, but by almost all measures that should mean the economy finding new and innovative ways to recover and grow.