The coronavirus pandemic has caused £2.3bn of spending to be lost or displaced in shops, pubs and cafes near London employment hubs, according to new analysis by a think tank.
The Centre for Economics and Business Research (Cebr) also estimated that the capital will lose out on roughly £178m a month of spending compared to pre-coronavirus trends as many people simply stop working in London’s business centres.
It comes after the government put reopening from lockdown on hold after an increase in coronavirus cases. The move raised the possibility that normal life could not return until there is a vaccine.
Economics think tank Cebr today estimated the cost people working from home is having on London’s business centres.
It said it thought the pandemic had resulted in £2.3bn of spending in shops, pubs and eateries near London employment hubs being lost or displaced between March and June.
Google mobility data shows that in April, the number of people going to places of work on weekdays was down 77 per cent compared to pre-coronavirus levels. By June, that figure was still 60 per cent lower than before the pandemic.
Full return to office unlikely
Cebr said that there is unlikely to be a full return to the office when the ‘new normal’ emerges in 2021. It said it is likely that for London 30 per cent of employees will still be working at home on any one day.
Far lower numbers of people travelling to work will badly damage the businesses set up to cater to workers. Cebr estimated that the capital will continue to lose out on around £178m per month compared to what employees previously spent near their places of work.
Cebr’s report coincided with its own return to its London office. Senior economist Pablo Shah said that when he returned to the office the city “looked like a ghost town”.
The think tank’s founder Douglas McWilliams has argued that London attracts people because it is fun. But Shah said: “London last week did not look very attractive to the talent it needs.”