UK economy will recover quickly amid vaccine roll-out

Significance

The fall highlights the economic impact of the second lockdown; the third, from mid-December, will cause GDP to fall in the first quarter of 2021. The accommodation and food services sector, and some parts of the retail sector, will be hardest hit.

Impacts

• The regionally disjointed recovery and fiscal pressures will make it harder for the government to pursue its ‘levelling up’ agenda.
• Post-COVID-19 behaviour will help adjust the balance between towns and cities but the pandemic will also weaken the sectors towns rely on.
• The central bank's review of negative interest-rates confirms that it is reluctant to cut rates but will do so if the downturn deepens.