16 October 2020
Initial results from Wave 15 of our Business Impact of Coronavirus (COVID-19) Survey (BICS) for the period 21 September to 4 October 2020 show that of businesses that had not permanently ceased trading, 41% said they had less than six months’ cash reserves and 4% said they had none. 35% said they had more than six months’ cash reserves and 20% were not sure.
In August 2020, retail sales volumes increased by 0.8% when compared with July; this is the fourth consecutive month of growth, resulting in an increase of 4.0% when compared with February’s level before the impact of the coronavirus (COVID-19) pandemic was seen. There was a mixed picture within the different store types as non-store retailing volumes in August 2020 were 38.9% above February, while clothing stores were still 15.9% below February’s levels.
Our latest labour market data, for June to August 2020, show the employment rate has been decreasing since the start of lockdown, while the unemployment rate and the level of redundancies have been increasing in recent periods. Total hours worked, while still low, show signs of recovering, and there are fewer people temporarily away from work. Vacancies also show signs of a recovery, with a record quarterly increase in the recent period. Early indicators for August 2020 suggest that the number of employees in the UK on payrolls was down around 673,000 compared with March 2020.
Monthly gross domestic product (GDP) grew by 2.1% in August 2020 as lockdown measures continued to ease. While it has continued steadily on the path towards recovery, the UK economy grew less than in recent months. There was strong growth in restaurants and accommodation following the easing of lockdown rules, the ”Eat Out to Help Out” scheme, and people choosing summer “staycations”. However, many other parts of the service sector recorded muted growth. Construction also continued its recovery, with a significant boost from housebuilding. There was limited growth in manufacturing, which remains down on its February 2020 level, with car and aircraft production still much lower than at the start of 2020.
Provisional estimates indicate the impact of the pandemic on public sector finances. The £173.7 billion borrowed in the first five months of this financial year (April to August 2020) is more than three times the £56.6 billion borrowed in the whole of the financial year 2019 to 2020.
This page is a summary of insights from our most recent analysis and will be updated as new publications are released. Sign up to our email alerts for daily updates in your inbox.
On this page
- Retail sales see fifth consecutive month of growth
- Risk of insolvency for businesses
- Average house prices continued to rise in August 2020
- Impact of Eat Out to Help Out on prices
- Public sector borrowing
- No increase in business closures yet
- UK labour market
- Productivity measure sees largest fall since 2009
- GDP, August 2020
- Eat Out to Help Out
- UK trade
- Coronavirus and non-UK workers
- GDP, April to June 2020
- International comparison of GDP
- Household savings and government borrowing
- Balance of Payments: Imports and exports
- Young people in the labour market
- Trading status and working arrangements
This page was last updated at 08:30 on 23 October 2020.
23 October 2020
Retail sales see fifth consecutive month of growth
Retail sales volumes increased by 1.5% in September 2020, compared with August; this is the fifth consecutive month of growth, resulting in an increase of 5.5% when compared with February’s pre-pandemic level. While non-food store sales have seen an increase, fuel and clothing sales are still below their February level, as fewer people travel to work.
In September, fuel was the only main retail sector with sales volumes still below February levels, as many continued to work from home. While non-food store sales as a whole recovered to above February’s levels, clothing sales volumes were also still 12.7% below February. In contrast, household goods stores sales volumes have increased to 11% above February’s levels.
In September, volume sales within non-store retailing were 36.6% higher than in February, as consumers continued to carry out much of their shopping online.
Food and non-store retailing were at higher levels in February, while fuel remained lower than February 2020
Volume sales, seasonally adjusted, Great Britain, September 2017 to September 2020
In the three months to September, retail sales volumes increased by 17.4% when compared with the previous three months; this is the biggest quarterly increase on record as sales picked up from record-low levels experienced earlier in the year.
22 October 2020
Risk of insolvency for businesses
Across all industries 71% of UK businesses were at no or low risk of insolvency, according to the latest Business Impact of Coronavirus (COVID-19) Survey (BICS).
In the week ending 18 October 2020, of all businesses in the accommodation and food services industries, 17% reported being at a severe risk of insolvency.
Following the accommodation and food services industry, the administrative and support service activities industry has the next highest percentage of businesses at severe risk of insolvency at 9%. Meanwhile, the real estate activities industry had the highest percentage of businesses at no risk of insolvency at 70%.
The percentage of adults who travelled to a place of work decreased by five percentage points to 60% according to the latest Opinion and Lifestyle Survey (OPN).
Conversely, the proportion of adults who worked from home exclusively increased to 25%, the highest since the start of August.
21 October 2020
Average house prices continued to rise in July 2020
The UK’s average house prices increased by 2.5%, to £239,000, over the year to August 2020, up from 2.1% in July 2020; this is £6,000 higher than last year.
Average house prices increased by 2.8% in England, 2.7% in Wales and 0.6% in Scotland over the year to August 2020. In Northern Ireland, average house prices increased by 3.0% over the year to Quarter 2 (Apr to June) 2020.
During July 2020, changes were made to Stamp Duty Land Tax, Land Transaction Tax and Land and Buildings Transaction Tax. The UK House Price Index (HPI) is based on completed housing transactions. Typically, a house purchase can take six to eight weeks to reach completion. Therefore, the price data feeding into the August 2020 UK HPI will mainly reflect those agreements that occurred before the tax changes took place.
21 October 2020
Impact of Eat Out to Help Out on prices
Last month’s prices release revealed that the 12-month inflation rate – measured by the Consumer Prices Index including owner occupiers’ housing costs (CPIH) – had fallen to 0.5% in August 2020, the lowest since December 2015.
This was mostly driven by lower prices in restaurants and cafés, as a result of the Eat Out to Help Out scheme and the temporary reduction of Value Added Tax (VAT) from 20% to 5% for firms in the hospitality sector.
In the absence of Eat Out to Help Out and the VAT reduction, our analysis estimates that the inflation rate would have been approximately 0.9% in August, compared with the actual rate of 0.5%. Most of this difference comes from Eat Out to Help Out.
Under the scheme, participating restaurants could offer a 50% discount on food and non-alcoholic beverages consumed on the premises from Monday to Wednesday, up to the value of £10 per person, with the remaining 50% paid by the government.
UK restaurants made claims for around 100 million covers during August, to the value of £522 million. By region, the average discount per meal ranged from £5.17 in the South West to £6.36 in London.
Comparing card transaction data from the fintech Revolut for August with the rest of and before the lockdown, we can see how consumer behaviour responded to the Eat Out to Help Out scheme. There are normally fewer transactions at the beginning of the week, rising gradually from Monday to Thursday, and considerably more transactions on Friday and Saturday.
The average for August, when Eat Out to Help Out was running, showed a flattening of this trend with a higher than usual proportion of transactions earlier in the week (Monday to Wednesday) and a lower proportion than usual at the weekend. This suggests that the discount offered earlier in the week may have incentivised some people to eat out on days when they otherwise would not have.
The proportion being spent on Monday to Wednesday was also higher during August than at other periods, despite a 50% discount being in effect. This may partly reflect a change in the type of purchases being made at this time with a shift towards sit-down meals.
For the latest inflation data, read our bulletin for September 2020.
21 October 2020
Public sector borrowing
Today’s public sector finance figures reflect the ongoing unprecedented impact of the coronavirus (COVID-19) lockdown and the government’s support for individuals and businesses.
UK borrowing was £36.1 billion in September 2020, nearly five times the £7.7 billion borrowed in September 2019 but broadly in line with the £33.6 billion market expectation.
Central government tax receipts were £37.7 billion in September 2020 (on a national accounts basis), £6.0 billion less than in September 2019, with large falls in Value Added Tax (VAT), business rates and Corporation Tax receipts.
Central government bodies spent £77.8 billion in September 2020 on day-to-day activities (current expenditure), £18.1 billion more than in September 2019, including nearly £5.9 billion on its job furlough schemes.
Provisional estimates indicate borrowing in the first six months of the financial year-to-September 2020 have reached £208.5 billion, more than three times the £54.5 billion borrowed in the whole of 2019 to 2020.
The need for the extra funding required to support the government’s coronavirus relief schemes combined with a fall in gross domestic product (GDP) has helped push debt at the end of September 2020 to 103.5% of GDP, the highest debt ratio since the financial year ending March 1960.
Today’s data highlight the emerging fiscal impact of the coronavirus pandemic but will be prone to material future revisions, and it will take many months before the true scale of the shock becomes clear.
15 October 2020
No increase in business closures yet
There was no increase in business closures in Quarter 3 (July to Sept) 2020, according to the latest data from the Inter-Departmental Business Register (IDBR).
While a higher number of closures might have been expected because of the coronavirus (COVID-19) pandemic, business deaths in Quarter 3 were slightly lower than in the same period in 2019 and similar to the number of closures in Quarter 3 of the past three years taken together.
Notable lags in the removal of a business from the IDBR, because of economic, legal and statistical processes, may explain why business closures have not risen significantly in Quarter 2 (Apr to June) or Quarter 3. Increased business closures as a result of the coronavirus pandemic may yet be reflected in data in subsequent quarters.
In contrast, the number of business creations in the UK in Quarter 3 2020 was slightly higher than in Quarter 3 2019, following a small fall in Quarter 2 2020. This is somewhat contrary to expectations that business creation would be significantly lower as a result of the coronavirus pandemic.
There is typically a shorter lag in adding businesses to the IDBR after the effective creation of the business than there is for removing businesses from the IDBR after their effective closure. As such, the rebound in Quarter 3 2020 is likely to reflect a genuine trend for increased business creation.
The types of businesses created during Quarter 3 2020 were also notably different to the types of businesses created in Quarter 3 in previous years. Broadly speaking, businesses created in this period were smaller than usual (based on both employment and turnover), with businesses created in Quarter 3 having fewer employees on average than in any other quarter in the past four years.
Industries less affected by the pandemic, including those that offer greater opportunities for homeworking such as professional and administrative services industries, made up a larger share of business births than usual in Quarter 3.
13 October 2020
UK labour market
Our latest figures on the UK labour market have now been published.
Early estimates for September 2020 suggest that there is little change in the number of payroll employees in the UK, with an increase of 20,000 compared with August 2020. Since March 2020, the number of payroll employees has fallen by 673,000; however, the larger falls were seen at the start of the coronavirus (COVID-19) pandemic.
Data from our Labour Force Survey (LFS) show the employment rate has been decreasing since the start of the coronavirus pandemic, while the unemployment rate and the level of redundancies has been increasing in recent periods. Total hours worked, while still low, show signs of recovering and there are fewer people temporary away from work.
Redundancies increased by 113,000 on the year, and a record 114,000 on the quarter, to 227,000. The annual increase was the largest since April to June 2009, with the number of redundancies reaching its highest level since May to July 2009.
After a record low of 343,000 vacancies in April to June 2020, there was an increase to 488,000 vacancies in July to September 2020. The level of vacancies is still 40.5% lower than a year ago.
Annual growth in employee pay strengthened in August 2020 as employees continued to return to work from furlough; this followed strong falls in the months since April when growth was affected by lower pay for furloughed employees and reduced bonuses.
The Claimant Count, an Experimental Statistic, has increased by 120.3% since March 2020. This includes both those who are working with low income or hours and those who are not working.
13 October 2020
Productivity measure sees largest fall since 2009
Labour productivity, as measured by output per hour, fell by 1.8% in Quarter 2 (Apr to June) 2020. This is the largest fall since Quarter 2 2009. This was driven by a measure of output, gross value added (GVA), falling faster than hours worked. Compared with the previous quarter, GVA fell by 21.5%, while hours worked fell by 20%.
Productivity as measured by output per worker fell by 19% in Quarter 2 compared with the previous quarter.
Output per hour and output per worker are usually more closely aligned, but the Coronavirus Job Retention Scheme (CJRS), which allows companies to keep staff employed while working zero hours, has resulted in a large disparity between the two measures, as many furloughed workers are still employed but not producing any output.
Further estimates of the effect of the furlough scheme on labour productivity have been explored in our latest labour productivity bulletin.
9 October 2020
GDP, August 2020
Monthly gross domestic product (GDP) grew by 2.1% in August 2020 as lockdown measures continued to ease. This is the fourth consecutive monthly increase following a record fall of 19.5% in April 2020.
The output of service industries remained 6.6% below the level of February 2020, growing by 2.4% in the latest month. The accommodation and food services sub-sector was the largest contributor to the increase in August.
The production industries remained 6.0% below their February 2020 level. Production grew by 0.3% in August 2020, with manufacturing growing by 0.7%.
Monthly construction output grew by 3.0% in August 2020, following record monthly growth of 21.8% in June 2020 and growth of 17.2% in July 2020; the level of construction output in August 2020 was 10.8% below the February 2020 level.
GDP grew by 8.0% in the three months to August 2020, as restrictions on movement eased across June, July and August. All headline sectors provided a positive contribution to GDP growth in the three months to August 2020.
9 October 2020
Eat Out to Help Out
There was monthly growth in August 2020 from accommodation and food and beverage service activities, with more businesses opening up to take advantage of the Eat Out to Help Out scheme, and increased demand for staycations.
Coronavirus and the impact on output in the UK economy: August 2020 contains analysis of monthly growth for the production, services and construction industries in the UK economy between July and August 2020.
Food and beverage services grew by 69.7% during August 2020. This was still 11.1% below the level of output seen in February 2020.
Data from the Monthly Business Survey (all sums are at current prices and non-seasonally adjusted) showed a significant increase in turnover of £1,506m from July to August 2020, for restaurants, cafes, pubs and clubs, to give a total of £4,092m in August 2020. This remains below the £5,056m level of turnover reached in August 2019.
The Eat Out to Help Out Scheme (EOTHO) offered food and non-alcoholic drink subsidies on Monday, Tuesday and Wednesday during August 2020. The subsidies are not captured within these figures. Business claims currently totalling £522m have been publicised.
Hotels and accommodation was still impacted by social distancing in August 2020 but provided a significant contribution to services growth, growing by 84.4% but output was 22.1% less than February 2020.
During August 2020 there was significant growth at camping and caravan sites, to record levels. The impact of staycations clearly had a positive effect in this sub-industry. The accommodation sub-industry, including cottages and holiday homes, also saw significant turnover growth of 26.4% but the level of turnover was 30.2% less than August 2019.
9 October 2020
Increases in imports and exports in the three months to August 2020 are detailed in today’s UK trade publication. Underlying exports grew by £21.4 billion, while imports increased by £17.5 billion. This has resulted in an increase in the total trade surplus, excluding non-monetary gold and other precious metals, to £7.7 billion.
The widening of the total trade surplus in the three months to August 2020, excluding non-monetary gold and other precious metals, was driven by an £11.9 billion increase in service exports, compared with a lesser £8.9 billion increase in service imports.
Road vehicle imports increased by £3.9 billion in the three months to August 2020 as dealerships fully opened. UK car finance applications rose by a quarter during July and first few weeks of August as many car owners had extensions to renew their personal contract purchase contracts during lockdown, which pushed their purchase of new cars into the summer.
Exports and imports of miscellaneous manufactures increased £2.5 billion and £2.6 billion respectively in the three months to August 2020, mostly driven by clothing and footwear. This aligns to the increase in retail sales of clothing seen in the three months to August, following sharp falls in March and April when lockdown measures were introduced.
8 October 2020
Coronavirus and non-UK key workers
Key workers have been at the forefront of efforts in the UK to address the impact and spread of the coronavirus (COVID-19) pandemic. In May 2020, in response to the pandemic, we published estimates of the numbers and characteristics of those who could be considered as potential key workers.
Our latest analysis, released today, provides more insight on non-British nationals and non-UK-born people working in these occupations, based on the 2017 to 2019 Annual Population Survey (APS).
Between 2017 and 2019, there were 32.3 million people employed in the UK workforce. During the same period, roughly a third (10.5 million) were employed in key worker occupations and industries. Similar to the total UK workforce, 10% of key workers were non-British nationals, with EU and non-EU nationals making up 6% and 4%, respectively.
The largest number of key workers worked in health and social care (3.2 million), of which 12% were non-British nationals.
EU15 nationals and Sub-Saharan African-born were the largest non-UK groups working in health and social care
Number of non-British nationals or non-UK-born by occupation group (all key workers, health and social care, and care workers and home carers), 2017 to 2019
30 September 2020
GDP, April to June 2020
UK gross domestic product (GDP) is estimated to have contracted by 19.8% in Quarter 2 (Apr to June) 2020, revised from the initial estimate of a 20.4% fall. This is the largest quarterly contraction in the UK economy since quarterly records began in 1955 and marks the second consecutive quarterly decline after a fall of a revised 2.5% in the previous quarter.
The GDP quarterly national accounts release captures the direct effects of the coronavirus (COVID-19) pandemic and the government measures taken to reduce transmission of the virus.
There have been record quarterly falls in services, production and construction output in Quarter 2 2020, which have been particularly prevalent in those industries that have been most exposed to government restrictions.
There have been large movements in all types of expenditure in Quarter 2 2020, most notably private consumption, which reflected the implementation of public health restrictions, the mandated closures of non-essential shops and forms of social distancing.
Household consumption fell by 23.6% in Quarter 2 2020, which is the largest quarterly contraction on record. The decline was driven by falls in spending on restaurants and hotels, transport, and recreation and culture.
Government healthcare consumption fell by 30.4% in Quarter 2 2020. This largely reflects the postponement or cancellation of healthcare treatments as the NHS increased its critical care capacity in its response to dealing with the pandemic.
Business investment fell by 26.5% in Quarter 2 2020, with the most commonly cited impact of the coronavirus being either a reduction or delay in investment.
The impact of the coronavirus pandemic on the global economy has led to large falls in gross trade flows in and out of the UK, reflecting a marked fall in global trade demand as well as how restrictions have disrupted international supply chains.
30 September 2020
International comparison of GDP
Many countries have now published estimates of gross domestic product (GDP) for Quarter 2 (Apr to June) 2020. These estimates highlight how the coronavirus (COVID -19) pandemic and the response to it have had an impact upon the global economy, with record declines reported in all of these countries.
The figures reflect how the size of the contractions have not been uniform across countries, in part reflecting the spread of the coronavirus in each country, and the timing of lockdown measures and when these were lifted. They also likely reflect the structural features of these economies, as some industries are more exposed to the response to the pandemic, such as those that involve interactions with other people.
Given the difference in timings of the imposition of lockdown measures between countries, it is useful to consider the cumulative fall in GDP in the first half of this year. The chart shows cumulative GDP growth in the first half of 2020 for all of the G7 economies.
International comparisons should be made with care if the estimates being compared are based on different approaches to measuring the volume of non-market output.
30 September 2020
Household savings and government borrowing
There were unprecedented sector movements in the non-financial accounts in Quarter 2 (Apr to June) 2020, as the economic impacts of the global coronavirus (COVID-19) pandemic intensified. These are captured in the Quarterly sector accounts, UK: April to June 2020 publication, and in Coronavirus and its impact on the UK Institutional Sector Accounts: Quarter 2 (Apr to June) 2020.
The households saving ratio increased to a record 29.1% in the latest quarter, compared with 9.6% in the previous quarter, as households reduced their consumption spending by a record £80.5 billion (negative 24.2%).
This is the largest quarterly fall in household spending recorded and was driven by large falls in expenditure on restaurants and hotels, transport – particularly air transport and motor vehicles - and recreation and cultural services.
This contributed towards a marked increase to the household net lending position, to 20.0% of gross domestic product (GDP) in Quarter 2 2020 from 3.0% in Quarter 1 (Jan to Mar) 2020.
General government net borrowing position increased to a record 22.6% of GDP in the latest quarter from 4.6% in Quarter 1 as the government’s economic policy response to the coronavirus pandemic increased its support for businesses and individuals. This included the extension of the Coronavirus Job Retention Scheme (CJRS) and the introduction of both the Self-Employment Income Support Scheme (SEISS) and the Small Business Grant Fund.
30 September 2020
Balance of payments: imports and exports
In Quarter 2 (Apr to June) 2020, total trade exports (£140.1 billion) decreased to their lowest levels since Quarter 2 2016, and imports (£123.2 billion) decreased to their lowest level since Quarter 3 (July to Sept) 2010, as governments introduced restrictions to combat the global coronavirus (COVID-19) pandemic.
Balance of payments, UK: April to June 2020 presents a measure of cross-border transactions between the UK and the rest of the world.
The trade in goods balance was more volatile than usual over the course of 2019 and continues to influence UK trade statistics in 2020. With increased financial market volatility as the coronavirus spread around the world, trade in non-monetary gold has fluctuated from quarter to quarter, as it is viewed as a store of wealth during uncertain times. The largest changes for trade in goods in Quarter 2 2020 were in trade in finished manufactured goods, with decreases of exports by £11.9 billion and imports by £14.0 billion.
Decreases in both imports and exports of trade in services reflected large decreases in transport and travel services, as governments around the world introduced travel restrictions to stem the spread of the coronavirus.
The primary income balance deficit – which records income the UK receives and pays on financial and other assets, along with compensation of employees – narrowed by £4.3 billion to £10.5 billion in Quarter 1 (Jan to Mar) 2020. The most notable decreases were in foreign direct investment (FDI) where losses exceeded profits because of government restrictions in the UK and around the world.
The trade and primary income figures both affect the UK’s current account balance. The UK current account deficit narrowed to £2.8 billion in Quarter 2 2020, or 0.6% of gross domestic product (GDP). This was mostly because of erratic movements in the trading of precious metals, especially non-monetary gold.
28 September 2020
Young people in the labour market
The impact of the coronavirus (COVID-19) pandemic on young people in the labour market is the focus of today’s Labour market economic analysis publication.
In the year to May to July 2020, the employment rate for young people reduced by 1.9 percentage points to 52.9%. The decrease in employment rate in the quarter to May to July 2020 was stronger for those aged 16 to 24 years, compared with all other age groups.
During the lockdown, young people were more likely than other age groups to be away from paid work. 38.7% of young people aged 16 to 19 years were temporarily away from work in this period, while 26.6% of those aged 20 to 24 years were also temporarily away from work. The people who were temporarily away from work include those who were on furlough.
Figures on take-up rates for the Coronavirus Job Retention Scheme (CJRS) show that young workers aged between ages 16 and 17 years have higher furloughing take-up rates (averaging 59%) than those aged 18 to 24 years (averaging 44%). Both of these rates were higher than the total take-up rate of 31%.
24 September 2020
Trading status and working arrangements
The latest publication of Coronavirus and the economic impacts on the UK provides indicators and analysis from the Business Impact of Coronavirus (COVID-19) Survey (BICS).
Trading status results have now been weighted by count of UK businesses and provide a representation of the business population. This differs to previous BICS publications where the estimates were unweighted. Across all industries, 84% of businesses were currently trading, compared with 66% of businesses in Wave 7 (1 June to 14 June 2020).
The information and communication industry, and the arts, entertainment and recreation industry had the highest percentages of businesses that were temporarily closed or paused trading, at 26% and 23% respectively.
Working arrangements presented in the chart have now been weighted by employment, where, in effect, businesses with larger employment sizes are given greater emphasis in results but all businesses in the population are accounted for.
Across all industries, of businesses not permanently stopped trading, 57% of the workforce were working at their normal place of work, while 27% of the workforce were working remotely instead of at their normal place of work.
24 September 2020