Even without a lockdown, the number of cases on the island is falling rapidly. The most contagious corona variant could have been the least dangerous for the company. That gives hope for Switzerland.
Temporarily closed: This London pub was also hit by Omikron at the turn of the year.
The omicron wave seems to be leaving Britain behind as quickly as it came. After the daily reported infections had exploded to almost 220,000 cases in early January, the decline now seems to be taking place just as quickly. Despite much turbulence, the most contagious strain of the virus to date may have been a brief scare for the UK economy.
This also gives hope for Switzerland, which was just as reluctant to tighten the corona measures as Great Britain – albeit from a somewhat stricter level. Boris Johnson’s government lifted all restrictions in the summer, but then announced “Plan B” at the beginning of December. That meant a return to the home office, if possible, masks and certificates for major events. However, the restaurants remained freely accessible.
Voluntary restraint braked
It’s not the new restrictions that have had the biggest impact on the economy. Instead, the British voluntarily exercised restraint in view of the very high risk of infection and avoided busy places. In the Christmas and New Year’s business, this restraint for the catering and hotel industry as well as some retailers came at the most unfavorable time of the year. From mid-December to the end of the first week of January, 44 percent of the catering and accommodation establishments recorded an unusually large number of cancellations. This was shown by a survey by the national statistical office. 60 percent of the companies in this branch reported lower sales than expected.
Meanwhile, wholesale and retail sales were a third below expectations. The balance is mixed here: Supermarket chains reported excellent sales figures because the British partied at home instead of away. Overall, however, the number of visitors to the shopping streets fell by a tenth; credit card spending for social activities shrank by a fifth. In comparison, Switzerland was lucky: a rapid increase in the number of infections only became apparent shortly after the turn of the year. There were no distortions in the Christmas business.
In both countries, an explosion in the number of absences from work caused by quarantine and self-isolation was unavoidable. In the UK, at the end of December, a record 3 per cent of the private sector workforce was on sick leave or had to stay at home – more than in the delta wave at the start of 2021. Some service businesses were missing up to 7 per cent of their workforce. Train cancellations, piling up mountains of rubbish and temporary business closures were part of everyday life on the island at times.
Just a dent in recovery
Since then, the quarantine requirements have been relaxed and the number of cases is falling rapidly. Because the hospitals are very busy, but not overwhelmed, there are already discussions about lifting “Plan B”. The bottom line is that the economic loss is likely to be much lower than in previous corona waves, according to Oxford Economics. Analysts expect gross domestic product (GDP) to fall 0.6 percent in December from November. Capital Economics expects 0.5 percent. Deutsche Bank expects a quarterly decline of 0.4 percent and concludes: so far, so good.
Ahead of Omicron, the UK economy was on a steeper recovery path than experts expected. In November, GDP grew by 0.9 percent compared to the previous month, as the statistics office announced on Friday. Economic output thus reached the level before the pandemic (at least according to one of several calculation methods). The delivery bottlenecks also eased somewhat. Because Omikron only temporarily put the brakes on, the prospects are still good, according to the major bank Barclays.
You can visit Benjamin Triebe, Business Correspondent for the UK and Ireland Twitter Follow.