Economic Impact of COVID-19 and Government Response in UK

The UKs government is
undertaking a study to
understand the economic impact
of the COVID19 and the
economic response of the
government and the central

Contents
Introduction......................................................................................................................................3
2.1: Impact of COVID 19 on UK economy...........................................................................3
2.2 major economic responses of UK government and their implications.............................4
2.3: Major responses of Bank of England and their implications to UK economy................6
2.4: Implications of BREXIT on economy of UK.................................................................8
Conclusion.......................................................................................................................................9
Reference.......................................................................................................................................10

Introduction
The contact of global covid-19 pandemic across economics of different sectors has been largely
disruptive. It had a impact on financial markets employment, travel industry and other different
sectors. Present report is based on analysing the different schemes that are introduced by the
administration to minimise the negative impact of covid-19 situation on present functioning
(Garnett, Doherty and Heron, 2020). There is also evaluation of the way brexit has presently
affected the functioning of country and the way it is going to impact in the upcoming future time
period. Based on this analysis for the there is evaluation of the impact post back covid-19
scenario on functioning of different sectors.
2.1: Impact of COVID 19 on UK economy
The scale of the depression that has been caused by the covid-19 pandemic is unparalleled in
modern Times. The GDP is declined by 9.8 % in 2020 that is the steepest drops inconsistent
records began in the 1948. During the first lockdown the UK GDP was 25% lower in April 2020
then it was only two months previous in the year February. Economic activity was chosen up
over the spring and summer of 2020 that reflected the opening of economy further. With time the
decline was much less than the first lockdown as consumers and business have already adapted
to the previous year. There has been recovery in spring & early summer in the year 2021 that led
to a rebound in GDP (Bholat Gharbawi and Thew, 2020). In the year July 2021 it was 2% lower
than before the pandemic. There is analysis of the main factors different sectors of economy
across different degrees. After recovery the economy reopened in the year 2021 economic
growth still appears to have slowed down in summer 2021. This was initially correlated with the
spread of delta variant and there were great number of people who were requisite to self isolate
because of the situation. Some of the factors are the destruction of global supply chains that is
leading to supply shortages of some goods (Corona virus and the impact on output in the UK
economy: December 2020).
Price in 2021 because of supply problems and is expected to continue into the year 2022. There
is a great deal of ambiguity over the economic Outlook and this is sustaining the process of
research agency of virus that is materially impacting the economy. Average forecast among
economics for GDP growth in the year 2021 is 6.8 %. Expectations and rise throughout the

spring and early summer as data has showed a sturdy recovery (How do government bonds work,
2020).
Government and Central banks have introduced policies that are intended to alleviate several of
the negative impact of the pandemic. In UK, Bank of England has announced many policies to
support business organisations. The main measures are intended to keep businesses afloat and so
that they are as possible employment (Adelekeand Gao, 2021). It includes monetary support for
workers business and wider public throughout the pandemic situation so that there can be
reduction of economic uncertainty. For the UK public finances is artificial by the economics of
coronavirus pandemic the government budget deficit has reached a peacetime record in 2020-21.
Key measures of government are required to be taken to support households and business across
different parts of the world. The pandemic impact on future deficit depends on the virus and the
way enduring harm is caused to the economy. The government that and the stock of past foreign
has invited to increase that is government that is equivalent to approximately 84 % of the GDP
that is close to 100%.
2.2 major economic responses of UK government and their implications
Eat out help out scheme
Eat out help out scheme is one of the government policy measures that was having main aim to
support business which are the opening after the covid-19 pandemic situation. The scheme was
formed as a part of chancellor summers economic update on 8 July 2020 and the main aim was
to planning for jobs. In this scheme the government has provided a 50% off on the cost of food
and other non alcoholic drinks which are eaten at participate business across UK. It is supplied
from Monday to Wednesday from 3 to 31 August and the discount is kept at maximum of 10
pounds per head. Overall 849 pounds million was claim in the scheme across 78000 110 outlets
(Markus. and Brainin, 2020). There were over 10 million individual means that were covered
and the average claim per cover was 5.24 pounds. The implication of the scheme on the economy
was that the total amount paid under the scheme helped in the process of dealing with the
situation of business reopening. This king held a lot in boosting the customer demand for eating
out on scheme days in the month of August in year 2020. However because of the pandemic
because situation got worse again in the month of September dining out dropped from mid
September because of the re-emergence of virus. There were restrictions that were imposed on