ALEX BRUMMER: Boris boosts confidence

Boris Johnson’s slow coach to Covid-19 freedom day on June 21 is cautious. It is seen by critics as eroding Britain’s hard-won vaccination advantage.

Yet, in its own way, it is bold. For the first time in a year of a stop-go approach to the health and fiscal responses to the pandemic, consumers and businesses have a greater degree of certainty about the future.

As frustrating and threatening as it may be for pubs, restaurants, gyms, exhibitions and other enterprises brought to the brink by lockdowns, it does provide an end to the uncertainty which is the great enemy of confidence. 

Boris Johnson's slow coach to Covid-19 freedom day on June 21 is cautious. It is seen by critics as eroding Britain's hard-won vaccination advantage. Yet, in its own way, it is bold

Boris Johnson’s slow coach to Covid-19 freedom day on June 21 is cautious. It is seen by critics as eroding Britain’s hard-won vaccination advantage. Yet, in its own way, it is bold

At the end of this period the UK should find itself in a better place than many of its competitors.

As an open economy, in which services make up some 72 per cent of output, the UK is highly dependent on our trading partners prospering.

It is encouraging to see that many of our larger corporations are using the hiatus caused by the pandemic and the opportunity of being outside the EU to reshape.

Aviva’s chief executive Amanda Blanc is pulling out of France with the sale of its offshoot there to Aema Groupe for £2.8billion. 

As part of his strategy review at HSBC, chief executive Noel Quinn also wants out of France and retail banking in the US to concentrate on wealth management in Asia.

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When Unilever unveiled a new strategy earlier this month, India and China were centre-stage. Global ambition may be of very little help for smaller hospitality enterprises, such as pubs, which have barely remained alive during lockdown.

But there is no reason to think that the Covid gravy train of furlough, breaks on business rates and VAT and local authority grants will be phased out in next week’s Budget, given the reopening timetable.

Some of the bigger pub groups, notably Mitchells & Butlers and Greene King already have found refuge in new ownership structures. 

An indication that certainty does have an impact came on the stock market where shares in the airline, travel, hotel and pub companies had a real zing.

Easyjet shares were up 11 per cent in early trading, before relinquishing half the gain, and travel companies reported sixfold increases in bookings albeit from low levels.

It may take longer for the ‘coiled spring’ of Bank of England chief economist Andy Haldane to be released but the roadmap provides a platform. UK adjustment to the speeded-up digital world is remarkable.

New data from global payments firm Worldpay (which began life in Britain) shows that British e-commerce climbed to £192billion in 2020, placing it third in the world behind the US and China.

The boost to e-commerce from Covid can be seen from public offers from The Hut Group, Moonpig and Dr Martens, which has a big online platform. Boohoo and Asos have moved into the space abandoned by Arcadia and Debenhams.

The objective of the Chancellor, Rishi Sunak, and Governor of the Bank of England, Andrew Bailey, from the start of the pandemic was to limit the scarring.

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There will be big changes and repurposing on the High Street. Financial hubs such as Canary Wharf will experience change as HSBC, among the banks, indicates it will need less space.

Survival for business has been made more possible by Covid loan schemes, investor support for fund raisings and furlough.

It is appalling that jobs for under-25s have suffered most from Covid but not unexpected since many first jobs are in retail and hospitality. However, unemployment at 5.1 per cent of the workforce is much lower than many of our competitors in the OECD.

The number of workers on payrolls actually climbed by 83,000 in January, the second month in a row unemployment claims dropped by 20,000.

For an older cohort that is still in work, average earnings climbed by 4.7 per cent in the three months to December – largely due to some of the lower-paid workers dropping out of the series.

Most forecasters expect the jobless rate to surge as furlough and other support schemes are removed. But, even at its peak, the jobless rate may remain below where it was after the financial crisis.

That should be regarded as a plus, given earlier dire warnings. Normality for the UK may feel like a lengthy car journey with kids in the back seat.

But it is no longer a mirage which vanishes into the distance.

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