Burr David Milliken
LONDON (Reuters) – Britain’s economy showed initial signs of recovery last week as the wave of coronavirus cases fueled by the omicron variable receded, after companies suffered a broad decline in business volumes in December.
Financial data released on Thursday showed a difference of 6 percentage points last month between the percentage of companies that reported a decrease in sales and the percentage that showed an increase, the largest drop in terms of net worth since April 2020, near the start of the pandemic.
Economists have predicted that the British economy could lose about half a percentage point of its output during December and January due to the Covid-19 rush, causing widespread employee absences and prompting many to limit social activities.
The British economy is being watched closely as an indicator for the rest of the world of the virus’s development, after Prime Minister Boris Johnson ordered relatively mild restrictions in December to curb the spread of the omicron.
After the recent halving of COVID cases from their peak in early January, Johnson on Wednesday commented recommending that citizens work from home whenever possible.
The world’s fifth-largest economy did not return to its pre-COVID size until November, after activity fell by as much as 25% at the start of the pandemic, when the country went into lockdown.
Business surveys showed a lot of activity in December, particularly for hospitality and beauty companies, with many customers staying at home even when there were no legal restrictions in most parts of the UK.
However, there are signs that the decline in the number of restaurants began to reverse last week.
Restaurant reservations in the week ending January 17 were 93% of their level in the equivalent week before the pandemic, up from 88% in the previous week, though still well below the 134% recorded in the week ending January 2.
Consumer spending on credit and debit cards also rose to 85% of its level in February 2020 in the week to January 13, up from 82% in the previous week, although these numbers are difficult to interpret because they were not adjusted to remove calendar influences. (Reporting by David Milliken, translated by Thomas Cobos, Editing by Javier Lira)
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