Lakhasly

With vaccinations being rolled out rapidly, there have been numerous calls from the business lobby for the UK lockdown to be lifted sooner than the dates set out in the official government roadmap for reopening.The mental health costs and economic effects on lower income, younger workers and minority groups has been disproportionate.Before the rollout of vaccines, the main policy to control COVID-19 was the use of social distancing measures and lockdowns.These have been effective in bringing down infections and deaths, but in our view the political appetite for imposing such measures may have waned in some quarters.As well as this tragic toll, the pandemic has also had severe economic effects.There have been more than 120,000 deaths directly due to the virus in the UK - one of the highest in the world.The UK's GDP dropped by 10% in 2020.In the UK, London and other areas of the south of England have seen more of a recovery than other parts of the country.

With vaccinations being rolled out rapidly, there have been numerous calls from the business lobby for the UK lockdown to be lifted sooner than the dates set out in the official government roadmap for reopening. There have been more than 120,000 deaths directly due to the virus in the UK – one of the highest in the world. As well as this tragic toll, the pandemic has also had severe economic effects. The UK’s GDP dropped by 10% in 2020. The mental health costs and economic effects on lower income, younger workers and minority groups has been disproportionate. In the UK, London and other areas of the south of England have seen more of a recovery than other parts of the country. Before the rollout of vaccines, the main policy to control COVID-19 was the use of social distancing measures and lockdowns. These have been effective in bringing down infections and deaths, but in our view the political appetite for imposing such measures may have waned in some quarters. Meanwhile, research suggests compliance with lockdown measures has declined over time, possibly due to “lockdown fatigue”.

UK’s vaccine rollout has been a welcome bright spot. The tension between the desires to continue restrictions and to remove them earlier than planned arises from the view that it is the lockdowns that are the main causes of economic damage. Is there merit to this view? The evidence from other countries gives some indication of the impact of the disease itself versus that of lockdown. If we compare Scandinavian countries – Norway and Denmark imposed lockdowns but Sweden did not – we can see the economic impact is similar for all countries but the health impact is larger on Sweden. In the USA, each state has followed its own health policy. This gives a natural variation across different areas and gives a clearer picture of the effects of lockdowns versus those from behavioural changes due to increased infections. Comparing movement of people within commuting zones with different jurisdictions shows that although consumer traffic fell by 60%, only 7% was due to legal restrictions. Granular data from private businesses in the US finds that state-ordered re-openings had small impacts on spending and employment.