There is no doubt that the global Covid-19 pandemic is here to stay for the foreseeable future. What was originally viewed by many as “just another flu” is now being taken very seriously by UK residents and businesses alike. Coronavirus or Covid-19 as it is also known, is due to impact an unprecedented number of global businesses both small and globally, with business experts unable to put a figure on how much the uk economy will suffer.
UK Businesses alone are expected to lose billions over the course of 2020 with unemployment rates also expected to rise drastically.
Will Coronavirus cause another recession?
It is very possible, and the reason for that is the number of different markets and industries that are affected by this disease outbreak. Hospitality, retail, travel and service industries are expected to be severely impacted by the global outbreak with a number of flight restrictions being placed on a number of locations.
Airline companies are having to cancel a number of flights around the world due to how contagious Covid-19 is. Not only that, individuals are also reluctant to appear in public spaces where there is a risk of coming into contact with someone that has the virus. For business owners of bars, restaurants and anything else hospitality related this will have a huge impact as those businesses rely on footfall through their front door in order to generate business.
With the recent advice that the government has issued, to stay away from bars and clubs, this will also add to the huge downturn in individuals going to these types of places.
Many people assume that the main industries that are to be hit are the travel and hospitality industries, however this is not the case, it goes much further than that. The retail industry, which is accountable for a huge percentage of the UK economy will be hugely hit, as the majority of this industry relies of physical footfall in order to generate business. This also applies to hairdresses, barbers, beauty salons and gyms.
Other industries that are set to be hugely affected include the recruitment industry as there is due to be a huge number of jobs cut. The building industry is again in for another tough time due to unemployment and uncertainty in their employment status and whether or not they have to take a reduced salary.
Coronavirus and Unemployment
There will be job losses, that is clear and evident to see. Unfortunately when any business experiences a huge downturn in business, the first to feel the wrath of this is more often than not, the employees. With businesses no longer being able to generate an income in order to cover their costs such as rent and wages, staff will be asked to either take unpaid leave or will be made redundant altogether.
Some businesses are also temporarily closing and as a result putting a hold on wages. With more and more employers now asking their workforce to work from home, this no doubt signals a huge shift in the governments first approach which was “business as usual”
As many different industries go hand in hand there is no restriction as to how many businesses will be affected by the global pandemic, particularly those that count on footfall.
For people that will be made unemployed by the coronavirus outbreak, the UK government also announced a freeze on loan and mortgage repayments in order to ease the financial burden.
What to do if you are financially impacted by Coronavirus?
If you have recently been made unemployed the first thing to do is to follow the governments guidelines and ensure that you negotiate a rental/mortgage payment break. The government have stated that these payment breaks will last for a minimum of 3 months. Although there is no guarantee that that Covid-19 will have cleared by then, the 3 month break could prove a vital lifeline.
Many direct lenders and even short term lenders such as paydaypixie.co.uk have also issued a pause on a number of loan repayments to help with cash flow.
Stay positive, remember that you are not in this alone, the whole world is in this together.