Friday 16 October 2020 9:32 am

We’re heading from London lockdown to national breakdown

Andrew Montlake is managing director of London-based mortgage broker Coreco

While London entering Tier 2 lockdown at midnight tomorrow is nowhere near as drastic as the Tier 3 lockdown imposed on the Liverpool City Region, it’s the size and symbolism of the capital that counts.

Read more: London, Essex and parts of Surrey to enter Tier 2 lockdown restrictions

With each day that passes, businesses in the capital, like those around the rest of the country, can feel the walls closing in. It’s suffocating and uncertain in equal measure. We knew that the winter was going to be bleak, but as things stand it’s going to be bleaker than even the most apprehensive had feared.

With Matt Hancock saying in the House of Commons today that the virus is “spreading exponentially”, few would bet against a short-circuit national lockdown, even if just for a week or two. The timing is brutal. Over the past two to three months, many businesses have slowly started to get back on their feet, but are now being punched back onto the canvas.

The economy is already in deep crisis mode and the growth in regional lockdowns will be the final straw for many businesses, especially those in the hospitality, retail and arts sectors. The tragedy that usually plays out in the country’s theatres is now playing out for real. Many more firms will go to the wall, many more households experience severe financial strain.

Even card-carrying Conservatives sense that we are being led by a government that is forever flip-flopping and playing catch-up. For many, the command taskforce driving these decisions is less gold than fool’s gold. 

The health secretary says there are “brighter skies ahead”, but for a huge number of businesses in every sector right now, it will be hard to see them. Much the same will apply to the public as a whole. We all know that this virus needs managing and controlling, but you can’t help but feel that the government has totally lost control. 

If there’s one positive in all this, it’s the way that businesses have toughened up and adapted to the new world order, which is ultimately defined by radical disorder. The problem — and it’s a massive one — is that to recover and fire the economy again, businesses need a degree of certainty in order to invest and thrive. Right now, that certainty just isn’t there, and it’s hard to see it emerging until spring 2021 at the earliest.

What we can now all agree is that the Covid-19 pandemic is making the global financial crisis look like a minor economic blip.

Read more: London lockdown: Tier 2 restrictions the ‘death knell’ for hospitality sector

Main image credit: Getty

City A.M.'s opinion pages are a place for thought-provoking views and debate. These views are not necessarily shared by City A.M.

Share:
Tags: