The UK risks a “catastrophic” strike by two-coronavirus and Brexit

The UK risks a “catastrophic” strike by two-coronavirus and Brexit
The head of the Confederation of British Industry, which represents 190,000 companies in the UK, warned on Thursday that companies would not be able to withstand another shock after coronavirus pandemic they checked their cash reserves and left many fighting for survival.

UK and EU officials are trying to agree on new terms of trade after Brexit took effect in January, but progress has been slow and time is running out to prevent it from collapsing when transitional arrangements expire in late 2020.

“The resilience of the British business is absolutely high,” said CBI Director-General Carolyn Fairbairn. BBC“Every little thing saved in cash, all the prepared stocks are ruined. The companies I’m talking about didn’t have a moment to plan any trade deal on Brexit at the end of the year,” she added. “As one [CBI] a member asked me that – just because the house is on fire, it’s not okay to plant a garden shed. “

British companies have already borrowed almost £ 35bn ($ 44.4bn) under government coronavirus relief programs, according to data released by the UK Treasury on Tuesday. And nearly 9 million people – about 27% of the workforce – rely on the state to pay all or part of their salary so far at a cost of £ 19.6 billion ($ 22.2 billion).

The United Kingdom is heading towards its worst economic downturn in more than 300 years due to the pandemic, even when racing towards a self-imposed deadline to obtain a trade agreement with the European Union, the single largest export market.
Large British companies have already announced more than that 75,000 job cuts, and increasingly comes with partial setbacks and social distancing. UK energy company Centrica (CPYYY) on Thursday said it is cutting 5,000 jobs mostly by the end of 2020, and bomber (BDRAF) confirmed that 400 jobs will be in place in Northern Ireland. Smaller companies are also shrinking, adding a total of hundreds of thousands of job losses.

Unemployment in the UK could rise to almost 15% in the fourth quarter if a second coronavirus epidemic occurs, according to the Organization for Economic Co-operation and Development.

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The Paris-based Paris-based agency said Wednesday it expects the British economy to shrink by 11.5% this year, even if a basic free trade agreement is reached with the European Union and a second wave of contagion is avoided.

This is the worst projected decline in major economies. And if infections re-emerge and stricter measures of social distancing are reintroduced, GDP could collapse by 14%, the OECD added.

Companies from the hospitality and tourism industries are at greatest risk. Many restaurants and pubs fear they will not survive, even if they are allowed to reopen next month, as planned, due to social distancing rules.

Cabinet ministers are now lobbying for the British two-meter social distance rule to be lowered to one meter, in line with the instructions of the World Health Organization, a government source informed of the discussions said. This will be key to reopening bars, restaurants and theaters and to ensuring public transport.

Tourism and tourism companies are furious at the impact of the new quarantine rules introduced on Monday requiring international arrivals to isolate themselves for two weeks. London Heathrow, Europe’s largest airport, he said on Thursday that it is no longer sustainable to protect new jobs, as it reported a record drop in passenger numbers of 97% in May, compared to the same month last year. It has already reduced management jobs by a third.

Travel and tourism are responsible for almost 4 million jobs in the UK, or 11% of the workforce, and 9% of UK GDP in 2019, according to the World Travel and Tourism Council. It is estimated that 1.2 million of those jobs could be lost in 2020 due to the pandemic.

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The deadline for Brexit is coming

Given the damage that Brexit will cause to an economy already on its knees without a treaty, Britain may have no choice but to extend the deadline for trade negotiations. He has such a request by the end of this month. Prime Minister Boris Johnson has insisted he does not want to do that.

But the talks did not go well and were further complicated by the pandemic, which forced negotiators to rely on video conference, Michel Barnier, the European Union ‘s chief negotiator for Brexit, said last week that “no significant progress has been made” since negotiations began, and that the United Kingdom is making progress on previous commitments.
Britain's largest companies are cutting tens of thousands of jobs. Millions more are at risk

David Frost, the chief negotiator on Brexit for the United Kingdom, said in a statement that “progress remains limited”, but insisted the talks were “positive in tone”.

“If we have a political timeframe that leads us to a fast-paced deal in December that will be disastrous for British business – they won’t be ready,” according to Fairbairn.

In a letter to Johnson on Thursday, the CBI made proposals for a “job-rich economic recovery.” The group called on the government to prioritize young people, invest in the green economy and focus on small businesses and those focused on high-growth sectors.

The OECD expects unemployment in Britain to reach 7.2% by the end of 2021, even if a second wave of infections is avoided and a trade agreement with the European Union enters into force. That’s up 3.9% at the end of the first quarter of this year.

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– Charles Riley, Julia Horowitz, Luke McGee, Chris Liakos and Sebastian Shukla contributed to this report.

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