London could face annual costs of more than £2bn if fresh curfew measures are implemented in the capital, according to a new report.
Leading think tank the Centre for Economics and Business Research (CEBR) today warned that 10pm curfews introduced elsewhere in the UK could reverse the country’s economic recovery if slapped on London venues.
It predicted that new lockdown restrictions would decimate a return to health for Britain’s pubs and restaurants, and would likely dent the British economy by more than £250m a day.
The CEBR added that new restrictions could cause GDP to sink between three and five per cent in the final three months of the year compared with the third quarter, when the UK economy plummeted to its deepest recession on record.
The think tank said that though a full second national lockdown is unlikely, partial lockdowns may eradicate progress in the hospitality sector brought about by chancellor Rishi Sunak’s Eat Out To Help Out scheme.
The scheme, which offered diners half price meals from Monday to Wednesday during August, helped shrink UK inflation to 0.2 per cent after providing more than 100,000 discount meals last month.
Douglas McWilliams, deputy chairman of the CEBR, said that a second national lockdown could “knock the stuffing out of consumer and business confidence”, causing widespread business collapse and unemployment.
“Whereas the first lockdown was bearable on the assumption that it was temporary, a second lockdown will make many people lose confidence in a recovery in the foreseeable future,” he added.
McWilliams said the winding down of the furlough scheme — which sees the UK government pay a portion of workers’ salaries — may also result in wide scale job losses.
“Tens of thousands of businesses are hanging on by a thread and likely to run out of cash,” he said.
It comes as London mayor Sadiq Khan over the weekend warned that the capital is only “two or three days behind” coronavirus hotspots in the north of England.
More than 10m people across the UK are currently living with tougher restrictions as the government attempts to clamp down on a new bout of infections sweeping the country.
Khan said it is “increasingly likely” that lockdown restrictions will soon be introduced in London, adding that it was his “firm view” that action should be taken sooner rather than later.