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Will the UK economy survive spiking infection rates again?


Since the beginning of the pandemic, millions of workers have been working from the confines of the home. Recently, lowering cases have permitted the return of white collar workers to the office. But with Covid infection rates once again rising to worrying heights, Uk offices are emptying quickly.


Last week alone 4.9 million UK citizens were infected by the rather persistent virus. This was a 15% increase from the previous week; such a high infection rate that even surpasses those when Omicron swept the UK in early January (4.3 million Britons had Covid in 1 week).


The effects of such a high infection rate are clearly being seen in the boardrooms where London's financial services executives report that meetings are being cancelled left right and centre.


In such a time like these, they feel that the Government is foolish to be withdrawing free testing and downgrading safer workplace guidance.


To respond, the Government has informed business lobby groups that there will be no rules on how companies are to treat staff with Covid. Instead, “principles for employers” are being prepared so as to aid companies to come up with their own policies going forward with Covid-19.


Whether this new approach to keeping the workforce safe will lead to sick employees being exploited with low sick pay is yet to be seen, but nonetheless raises some concerns.


Another new policy of the Government in order to combat Coronavirus is opening up the vaccine rollout to more than 5 million children aged between 5 and 11 years old in England. Parents are now able to book an appointment online or take their children to walk-in centres,


This strong vaccine rollout is aimed to reverse a loss of confidence within the UK economy that a current rise in Covid-19 infections may cause. Such an occurrence would undoubtedly edge the economy closer to another downfall, which many businesses may not be able to drive.


With consumer debts reaching record highs, the Bank of England gearing towards higher interest rates and high inflation due to a cost of living crisis, a downward economic spiral would also lead to a mass of trouble. One such is unemployed consumers (arising from the collapse of businesses nationwide) defaulting on their debts.


This combined with increasing costs of living will place further pressure on individuals in the event that they lose their jobs. The situation is magnified by the Job Seekers Allowance (JSA) not rising with inflation rates at 6.2%, meaning the allowance has shrunk considerably in real terms.


However, it must be noted that the JSA is considerably small, only £77 a fortnight for over 25s. Therefore, it hardly has enough substance to maintain consumption levels within the economy and thus, the failure to rise with inflation has limited effects.


Nonetheless, once again the current situation of escalating covid infection rates raises many causes for concern, and the health of the UK economy is again in a perilous position.

 

Written by Charlotte Hurst


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