UK's economy likely to be hit by snow effect
Source: Agencies |
January 22, 2013, Tuesday
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A wintry burst of weather hit businesses and travellers across Britain for a fourth day yesterday, threatening an unprecedented "triple-dip" recession that could knock the government's economic plans further off track.
Commuters fought to get to work as airlines and train operators struggled to deal with a blanket of snow and ice, while some 3,000 schools were closed, forcing parents to stay at home to look after children.
Figures this week look set to show the economy shrank again in the fourth quarter of 2012. The snow-induced a loss of working days for manufacturers and builders, allied to falls in business for shops, pubs and restaurants, could now push the first quarter of 2013 into the red also.
Even if the economy does turn around later, it would leave the government seeking to dispel fears of slow growth well into next year - with an election due the year after.
"At a time when retailers are already under pressure, bad weather which keeps people from going shopping is very bad news," said Richard Dodd from the British Retail Consortium body representing the country's major chains.
"That said, it would have been much worse had it happened over Christmas."
Shop owners and workers on a deserted Oxford Street, central London's main shopping destination, said trade had been hit heavily since Friday.
Jay Gordon, manager of a hairdresser's just off the main thoroughfare said half of his customers had cancelled over the weekend, at a cost of 30-100 pounds per head. "On Saturday, we had 15 no-shows. It's a loss of revenue," he said.
Economists said that while retailers may be able to make up the lost sales as customers come back to buy later what they would have bought anyway, the impact on construction and manufacturing is harder to smooth over quickly.
"Assuming the fourth quarter is as substantially negative as we now fear, we will almost certainly be heading back into recession," Peter Spencer, chief economic adviser to business think-tank the Ernst and Young Item Club, said. "When the economy is bouncing along the bottom anyway, a bout of bad weather can easily tip it into negative territory."
There was a familiar hum of national outrage at train stations and airports about the struggle to run normal services more than 12 hours after the last snowfall in many areas on Sunday evening.
Heathrow has also come under criticism for not handling inclement weather well.
Commuters fought to get to work as airlines and train operators struggled to deal with a blanket of snow and ice, while some 3,000 schools were closed, forcing parents to stay at home to look after children.
Figures this week look set to show the economy shrank again in the fourth quarter of 2012. The snow-induced a loss of working days for manufacturers and builders, allied to falls in business for shops, pubs and restaurants, could now push the first quarter of 2013 into the red also.
Even if the economy does turn around later, it would leave the government seeking to dispel fears of slow growth well into next year - with an election due the year after.
"At a time when retailers are already under pressure, bad weather which keeps people from going shopping is very bad news," said Richard Dodd from the British Retail Consortium body representing the country's major chains.
"That said, it would have been much worse had it happened over Christmas."
Shop owners and workers on a deserted Oxford Street, central London's main shopping destination, said trade had been hit heavily since Friday.
Jay Gordon, manager of a hairdresser's just off the main thoroughfare said half of his customers had cancelled over the weekend, at a cost of 30-100 pounds per head. "On Saturday, we had 15 no-shows. It's a loss of revenue," he said.
Economists said that while retailers may be able to make up the lost sales as customers come back to buy later what they would have bought anyway, the impact on construction and manufacturing is harder to smooth over quickly.
"Assuming the fourth quarter is as substantially negative as we now fear, we will almost certainly be heading back into recession," Peter Spencer, chief economic adviser to business think-tank the Ernst and Young Item Club, said. "When the economy is bouncing along the bottom anyway, a bout of bad weather can easily tip it into negative territory."
There was a familiar hum of national outrage at train stations and airports about the struggle to run normal services more than 12 hours after the last snowfall in many areas on Sunday evening.
Heathrow has also come under criticism for not handling inclement weather well.
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