It’s become clear for some time now, that as well as the short-term impacts that Covid-19 has had on countries worldwide, there will be many long-lasting impacts, the likes of which we have yet to fully understand.
The devastating effects that this virus has had on people’s health has been felt the world over, however each country has been impacted in different ways when it comes to the economic and social consequences of this global pandemic.
In this article, our E-Team Group Leaders in London, Phil Oakley from Gerson Relocation and Ian Miles from James Cowper Kreston, have given us some insights into what they believe are the short, medium and long term effects that Covid-19 will have or has had on the UK.
“The UK has seen a dramatic fall in its GDP since the start of the lockdown with the travel and financial markets adversely affected,” Phil Oakley tells us, which has already created adverse short-term effects.
Most importantly, the drop in economic output has meant that “there has also been a large rise in unemployment due to businesses either looking to cut costs or not being able to sustain business,” explains Phil.
Ian Miles gives us an insight into some of the main industries that are struggling in the UK right now, mainly “the travel and hospitality industries, pubs and restaurants, and of course, the Arts.” For the people working in these industries, there is an uncertainty in regard to how long Government support will last, and what they are going to do when it ends. This unemployment that has been on the rise is set to remain high, as many businesses have been forced to close down permanently or downsize.
The UK’s expat community is not immune to this rise in unemployment. Phil tells us that during this pandemic, many expats living and working in the UK have had to return back to their home countries, which has led to a rise in cancelled assignments. The UK’s economic downturn has also meant that there has been a drop in the number of global assignments available in the financial services sector.
One sector of the UK economy which has led to a rise in both “recruitment and mobility”, according to Phil, is the Pharmaceutical industry, due to an increase in Research and Development. However, this is one of a very few industries that is not struggling to ensure job security.
In addition to the clear economic ramifications that Covid-19 has been having in the short term, it has also had an impact on many people’s family lives. While some people have embraced the ‘Work from Home’ philosophy, others are struggling to multitask working from home, with home-schooling their children.
Furthermore, with schools trying to re-open safely, it is difficult when expats need to continue travelling for work. Ian poses the questions, “If an employee goes on a short-term foreign business trip, will the individual be able to get back? If they can, will they then need to self-isolate together with their family for 14 days?” The concern here is whether this self-isolation could prejudice children trying to return to school.
Medium Term/Long Term
In the medium to long term, people will start to adjust to the restrictive environment even when the rules are removed. The most evident area we will see this is in the workplace.
As people in the UK begin to adjust to working with restrictions in place, Ian predicts that there will be an increased reliance on technology, in particular the use of video calling and meetings. “Meetings seem to take half the time that face to face meetings take,” he observes. These new adjustments will include a decrease in travelling for work, as businesses adapt to the “new normal”, with travel restrictions still heavily enforced in the UK.
In terms of the long-term success of the UK economy, both Ian and Phil agree that it’s almost impossible to predict how long the recovery process will take. This recovery is dependent on the length of time social distancing is going to be in place for, as well as potential spikes in Covid-19 outbreaks leading to the need for future lockdowns.