OSHANA BENOTMANE | LEGAL JARGON WRITER
Earlier this month, Britain recorded a recession worse than any other European or North American country due to the novel Coronavirus Pandemic. This comes after over three months of nationwide lockdown, pushing the economy to a 20.4% drop compared to the first three months of 2020. This is a significant amount compared to figures recorded in France (-18.8%), Italy (-17.1%) and even the US at -10.6% [Source: Office for National Statistics, OECD].
The British economy is mainly dependent on consumer spending, which was hugely affected during the extended lockdown. In comparison to its neighbouring countries, the UK stayed in lockdown significantly longer and re-opened in much slower phases. In the second quarter, UK’s spending on accommodation and food services reduced by 87%, schools and workplaces remained shut, and a strict travel ban proved that spending in the UK plunged, leading the UK into its first recession since 2009.
Figures released by officials in the government have shown that employment fell by 220,000 between April and June. In a bid to recover the UK economy, the government has urged the British people to return to work at their offices and plans on re-opening schools. In addition, the government has launched the “Eat Out to Help Out” scheme, providing discounts for meals from Monday to Wednesday, hoping to help restaurants and save businesses.
However, businesses are urging the government to do more to support them during this period of recovery. Recent data shows that companies are still struggling to pay the bills on time and are forced to close down many of their stores.
This is especially worrying as individuals feel unprepared and anxious about the end of furlough in October. The government hopes that the UK economy will be back on its feet in October, giving back all the jobs that have been suspended since lockdown. Yet, the Bank of England and many other establishments have warned that the English economy may not be stable until early next year.
Some believe there is still hope for the UK as they work to avoid a second wave of lockdown. As other countries in Europe see recent spikes in the number of cases, France recording its highest increase just last week since May, the UK hopes to keep cases down hopefully boosting the economy back up.
Commercial Awareness question:
How do you think this will affect law firms as a business and their clients?
Will law firms survive the recession if their clients don’t?
Oshana Benotmane is a second year law student at Queen Mary University of London. Outside her studies, Oshana is also involved with the Commercial Awareness Society and QMLAC. She is aspiring towards a career in corporate law in the fields of M&A and FinTech.
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