United Kingdom risks influencing one or two coronavirus and Brexit

United Kingdom risks influencing one or two coronavirus and Brexit

The head of the British Industry Association, which represents 190,000 British companies, warned on Thursday that companies will not be able to withstand yet another shock Corona pandemic virus They knocked out their cash reserves and left a lot Fighting for survival.

UK and European Union officials are trying to agree new trade terms after Britain’s exit from the European Union took effect in January, but progress has been painfully slow and time is running out to prevent a rupture when transitional arrangements end at the end of 2020.

“The resilience of British business on the ground is absolute,” Caroline Verbern, CBI General Manager, told Reuters. BBC. She added: “Every penny of cash that was stored, all the stocks that were prepared were damaged. The companies I am talking to did not have a moment to plan an exit package from the European Union at the end of the year.” “as one [CBI] Member put it on me – just because the house is burning, it is not allowed to set fire to the garden shed. “

British companies have already borrowed nearly 35 billion pounds ($ 44.4 billion) in government coronavirus relief programs, according to figures released on Tuesday by the British Treasury. Nearly 9 million people – about 27% of the workforce – depend on the state to pay their salaries in full or in part, at a cost of 19.6 billion pounds ($ 22.2 billion) so far.

The UK is heading for the worst economic meltdown in a year More than 300 years old Because of the epidemic, even when they raced toward the self-imposed deadline to get a business deal with the European Union, the largest single export market.
Major British companies have already announced more than 75,000 job cuts, And more comes as partial closings and social exclusion continue. British Energy Company Centrica (CPYYY) Thursday said 5,000 jobs, most of them by the end of 2020, would be cut Bombardier (BDRAF) It confirmed that 400 jobs would go into its operations in Northern Ireland. Small businesses are also being hit, adding hundreds of thousands of job losses to the total.

UK unemployment could rise to nearly 15% in the fourth quarter if there is a secondary outbreak of coronavirus, according to the Organization for Economic Co-operation and Development.

The Paris-based agency said on Wednesday it expects the British economy to shrink 11.5% this year even if a basic free trade agreement with the European Union is reached, and a second wave of injuries is avoided.

This is the worst expected contraction among the major economies. The Organization for Economic Co-operation and Development added that if infection rates rise again and re-introduce tighter social distraction measures, GDP may drop by 14%.

A souvenir shop is closed on Oxford Street in London.

The most vulnerable are companies in the hospitality and travel industries. Many restaurants and bars fear that she will not survive, even if she is allowed to reopen next month as planned, due to social separation rules.

A government source familiar with the discussions said that government ministers are now pushing to reduce the base of social distances of two meters in Britain to one meter in line with the directives of the World Health Organization. This will be crucial for reopening bars, restaurants and theaters, and for ensuring that public transport can operate.

Travel and tourism companies Angry at the impact of the new quarantine rules Filed on Monday that require international arrivals to isolate themselves for two weeks. London Heathrow, the largest airport in Europe, Thursday said It is “no longer sustainable” to protect frontline jobs, reporting a record 97% drop in passenger numbers in May, compared to the same month last year. Management positions have already been reduced by a third.

Travel and tourism are responsible for nearly 4 million jobs in the UK, or 11% of the workforce, and 9% of the UK’s GDP in 2019, according to the World Travel and Tourism Council. It is estimated that 1.2 million of these jobs could be lost in 2020 due to the epidemic.

The deadline for Britain to leave the European Union is looming

Given the damage that Britain’s exit from the European Union without a deal might actually cause the economy to stagnate, Britain may have no other choice but to extend the deadline for trade talks. It has until the end of this month to make such an application. Prime Minister Boris Johnson has consistently said that he does not want to do so.

But the talks did not go well, complicated by the epidemic, which negotiators were forced to rely on Video conferencing. Michel Barnier, the chief European Union negotiator on Britain’s exit from the European Union, said last week that there had been no “significant progress” since the start of negotiations, and that the UK continued to back down from previous commitments.
Britain's largest company is cutting tens of thousands of jobs. And millions more are in danger

David Frost, chief negotiator for the Brexit, said in a statement that “progress is still limited” but insisted that the talks were “positive in tone.”

According to Fairbairn, “If we had a political timetable that would take us to the brinkmanship deal in December it would be disastrous for British business – they wouldn’t be ready.”

The Iraqi Central Bank put forward proposals for a “job-rich economic recovery” in a letter to Johnson on Thursday. The group called on the government to prioritize building skills for young people, investing in a green economy, and directly stimulating small businesses and those focusing on high-growth sectors.

The Organization for Economic Co-operation and Development predicts unemployment will reach 7.2% in Britain by the end of 2021, even if a second wave of injuries is avoided and a trade agreement with the European Union enters into force. This is compared to 3.9% at the end of the first quarter of this year.

Charles Riley, Julia Horowitz, Luke McGee, Chris Leakos, and Sebastian Shukla contributed to this report.

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