2021-01-26 17:02

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TUC Report: Impact Of Covid-19 And Brexit On The UK Economy

Review of forecasts published between July-November 2020

TUC have prodused a detailed report into how the double blow to the UK from Covid-19 and Brexit will damage the country’s economy, standards of living, and ultimately of the health and welfare of the nation!

This brief sets out key themes from some of the recent analysis to emerge on both the impact the changing nature of the UK’s trading relationship with the EU and the rest of the world from January 1st 2021 and the impact of the Covid-19 pandemic.

Pic: TUC Brexit Covid BriefThe UK’s deal [if there is one] with the EU seems likely to be a ‘thin’ trade deal and will not be the smooth transition that many had hoped for. Some of the impacts such as customs and border disruption will be front loaded whereas others may materialise in the longer term as the UK diverges from the EU on things such as product standards or other regulations.

The Covid-19 crisis and its economic impact will also have profound structural effects on the UK economy and labour market as the crisis continues to speed up existing trends such as the move to more online shopping, whilst seeing growth in newer trends such as more people working from home.

The nature of both are likely to lead to a long and protracted restructuring of the UK economy, the impact of which will be felt for many years to come.

Recent analysis suggests that:

  1. in most cases it is likely that that the regions and sectors most affected by the economic impact of Covid-19 are not the same as the regions and sectors likely to be most exposed to Brexit (though there are some exceptions), but that both crises combined will have a broader impact on the UK than either would have done in isolation.

  2. Manufacture of automotive, transport equipment, chemicals and chemical products and textiles, and services such as finance and communications are the most exposed sectors to Brexit. Hospitality, tourism, transport and arts and entertainment are the most exposed sectors in relation to economic impact of Covid-19. The automotive industry is one of the sectors that has experienced a downturn due to Covid-19 and is likely to be significantly impacted by Brexit.

  3. Both the economic impacts of the coronavirus and the impact of Brexit are likely to increase regional disparities. London, the North East, Wales, the South East and the West Midlands are most exposed to Brexit associated risks, whereas tourism dependent coastal communities and hospitality dependent cities such as Manchester, Liverpool, Glasgow and large parts of London are likely to be most exposed to the short term economic impact of Covid-19. The North West, London, South East and the West Midlands may experience a ‘double whammy’ of both the economic impact of Brexit and Covid-19.

The full and summary reports can be downloaded from the Unionsafety E-Library

Source: TUC

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