Despite one of the planet’s most successful vaccination campaigns, U.K. Prime Minister Boris Johnson is now pushing back plans to drop all lockdown restrictions in England, disappointing businesses that were eagerly anticipating a June 21 full reopening.
The latest extension of lockdowns could mean another four weeks of shuttered businesses and nightclubs, as well as a stop to gatherings of more than six people indoors.
Just two months ago, the world looked to the United Kingdom, and to England, as a model. Its campaign to rapidly inoculate the country against the ravages of COVID-19 was seen by some as the envy of the world. Lately, infection rates have creeped up, however, pushing the Johnson government to do the unthinkable: press pause on plans to fully reopen.
The decision isn’t going down well with business owners.
Hospitality groups like the Institute of Directors have rallied against the delay, noting continued social distancing in pubs and restaurants will curtail earnings during the peak summer period, and called upon the government to financially support these businesses.
The news comes at a crunch time for U.K. Businesses. One year has passed since the U.K. Government launched its “bounce back loan” program, where it backed £46.5 billion ($65.8 billion) in loans to 1.5 million small businesses to help them out while lockdown measures were instituted. The government is now asking small businesses to begin paying up after the 12-month payment holiday.
Quarterly rent will also be due next week, and the ban on commercial rent evictions also ends at the end of June, which landlords—who lost out on £6 billion of rent from tenants, according to a Financial Times report—will be keen to retrieve.
Britain’s high street is also hurting. In a recent report by the British Retail Consortium, two-thirds of retailers face legal action once the moratorium ends in July.
Lastly, businesses will also now have to begin contributing 10% toward furlough costs, which was once a fully government-funded employment salary payment scheme.
Twitter revolt
On Twitter, hashtags like #ImDone are trending across the United Kingdom, indicating a growing citizens unrest against renewed lockdowns.
The delay is caused by the number of COVID-19 cases quadrupling in the past three weeks—three-quarters of which could be traced to the more infectious delta variant, which originated in India, according to Public Health England.
But despite the news, economic data seems promising. Berenberg analysts found that the economic data is on pace to beat expectations with GDP rebounds increasing from 6.8% to 7%—much higher than the EU expected GDP increase of 4.7%.
ING developed markets economist James Smith, meanwhile, noted that a couple more weeks of renewed lockdowns wouldn’t have a huge impact. He said “at most we’re talking a few tenths of a percentage point off near-term GDP.” However, a lot will hinge on consumer and business confidence levels, and whether the news will dampen spirits among consumers and businesses, he added.
But to add insult to injury, in the face of delayed lockdowns, the U.K. Must watch its EU neighbors gleefully reopen businesses, despite their slower vaccination rollouts. France is ending its lockdown restrictions and curfews at the end of June, while Spain has completely opened its borders and opened up all of its amenities, while keeping only mask rules in place.