Omicron fears lead to 10-month low in economic growth

Empty high street with Covid restriction sign
The UK economy has seen its slowest growth since the country was last in lockdown
// The UK economy has seen its slowest growth since the country was last in lockdown
// Trade unions are calling on the government to offer business support for retailers

Omicron fears have seen shoppers staying at home during the crucial run-up to Christmas, slashing the UK’s economic growth to its slowest pace since February, as trade unions and others call for additional support.

Businesses are reporting lower customer demand since the Plan B restrictions came into force in the first week of December, while the current spike in the number of people testing positive with the Omicron variant has also seen many consumers staying away from crowded places.

The IHS Markit/CIPS Flash UK Composite PMI, a closely followed survey of private companies, has scored 53.2 so far this month – showing a much slower rate of growth than November’s 57.6 score. The December figure is likely to change by the end of the month.

The figures lend further weight to fears that retail and hospitality will struggle over what should have been the busiest period of the year, and come as the government is facing ever-louder calls for a package of business support measures.

The Trades Union Congress called on ministers to “introduce a permanent short-time working scheme – like furlough – for hard-hit sectors like travel, manufacturing, hospitality, retail and the arts”.


READ MORE: Consumers take to the shops as Omicron spreads, says ONS


“The flash PMI data shows the UK economy being hit once again by Covid-19, with growth slowing sharply at the end of the year led by a steep drop in spending on services by households,” said IHS Markit chief business economist Chris Williamson.

“Some brighter news came through from manufacturing, where an easing of supply chain delays helped lift production growth, but more importantly also helped take some upward pressure off prices to hint at a peaking of inflation.”

Williamson also reported the spread of Omicron means the UK is likely to face a further drop in economic growth well into 2022 as people are urged to cut back on their socialising even further.

The UK recorded its highest-ever number of coronavirus cases on Wednesday, with 78,610 registered in a 24-hour period.

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1 COMMENT

  1. It’s not the Omicron fears. It’s the panicking from the authorities and the re-introduction of restrictions and forced mask wearing, which causes the fear and therefore stops people going out.

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