The COVID-19 pandemic has dealt a £251bn ($348.2bn) blow to UK economy over an year, according to data.
The Centre for Economics and Business Research (CEBR) calculated the figure by comparing its final pre-COVID forecasts from the beginning of 2020 with the most recent data on actual economic output.
This reduction is roughly equivalent in size to the entire annual output of the South East, in pre-COVID circumstances, and nearly twice the output of Scotland.
CEBR estimated the size of the COVID-19 losses in each of the UK’s regions and found that, in absolute terms, the losses in London have been the highest, amounting to £51.4bn of lost activity. This was followed by the South East and East of England, with losses of £34.7bn and £26.6bn, respectively.
Although, while London contributed 20.5% of the overall loss in activity as a result of coronavirus, the capital contributes just under a quarter of the country’s activity ordinarily.
As such, London’s contribution to the £251bn of UK-wide losses was smaller than expected given the size of its economy.
This can be explained through London’s comparative advantage in sectors such as finance & insurance and information & communication, with these fields exhibiting some of the smoothest transitions to remote working, the report said.
The opposite was the case for regions such as the West Midlands, East Midlands, and the East of England, where COVID-induced losses were larger than expected given their typical contribution to the economy.
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The CEBR said that sectoral composition could be one factor in this, with a greater degree of output in these regions stemming from wholesale & retail and transport & storage, two sectors that have been heavily hit by the lack of consumer footfall.
These regions were also amongst those to experience region-specific restriction measures at some point in 2020 while other parts of the country were largely opening up, with local lockdowns occurring in Birmingham, Leicester, and Luton.
Differing degrees of restriction measures could also explain Scotland’s relatively larger contribution to the UK’s overall economic losses, with much activity being curtailed across the country’s central belt in light of growing case numbers in Q4 2020.
The study also found that although the UK economy is likely to bounce back to pre-pandemic levels in the next 12 months, some regions may be more subject to lingering effects from the pandemic, such as higher rates of joblessness and a greater degree of business closures.