The UK Center for Economics and Business Research (Cebr) revealed that households across the United Kingdom will see a drop in cash available for essential spending amounting to 43 billion pounds ($53.7 billion) in the second quarter of 2020 due to the economic crisis caused by the COVID-19 pandemic
MOSCOW (Pakistan Point News / Sputnik - 20th April, 2020) The UK Center for Economics and business Research (Cebr) revealed that households across the United Kingdom will see a drop in cash available for essential spending amounting to 43 billion Pounds ($53.7 billion) in the second quarter of 2020 due to the economic crisis caused by the COVID-19 pandemic.
"Cebr has estimated the total impact that households will see on their disposable incomes (i.e. income adjusted for taxes and benefits) and found that there will be a 17% reduction in the earnings households have available for spending in Q2 2020 as a result of changes in the labour market," the press release published on the Center's website on Monday said.
According to Cebr, the main reason for such a drastic fall is that many people, especially lower-paid workers, will lose their jobs amid the lockdown, as businesses are trying to reduce wage costs to preserve cash flow.
"The Office for Budget Responsibility estimates that job losses could reach up to 2.1 million in the second quarter, the majority of which will be among lower paid workers. We have therefore assumed that the largest part of the increase in unemployment will be observed at the lower end of the wage spectrum. Benefits claims will replace some of the lost disposable income, but not all of it, leaving UK households �1.5 billion out of pocket per month," the press release stated.
The IHS Markit consulting firm, in turn, said that the financial wellbeing of UK citizens significantly deteriorated in April amid the lockdown despite "unprecedented government support." According to the firm, its IHS Markit Household Finance Index, which measures households' overall perceptions of financial wellbeing, dropped to 34.9 in April from the 42.5 level in March.
The United Kingdom has so far confirmed 120,067 COVID-19 cases and 16,060 fatalities in the country. On Thursday, the UK government extended lockdown measures to curb the spread of the coronavirus disease for another three weeks.
