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COVID-19
UK Economic Update
For more information on the potential business impact of COVID-19, please visit www.pwc.co.uk/covid19
13 May 2020
Summary
This week’s edition provides an update on our latest economic data, including the final results from wave 3 of the ONS Business
Impact of Coronavirus Survey and highlights from the Bank of England’s Monetary Policy Report (May 2020). We also present some
new analysis on the ‘return to work’ strategy, and what a phased approach to lifting sector restrictions could look like. Our COVID-19
scenarios for the UK economy remain unchanged for the time being. Our COVID-19 scenarios for the UK economy remain
unchanged for the time being. They envisage a decline in GDP in 2020 of around 5% to 10% followed by a more gradual recovery in
2021. More recent survey data points to a steeper economic decline, towards the lower end of this range.
• Strategy for easing the lockdown has been announced: The government has signalled a modest relaxation to social distancing rules to apply from 13 May, allowing people to
leave their homes multiple times per day, and for employees who cannot work from home to return to work following social distancing rules and avoiding public transport where
possible. Other measures will stay in place however, meaning restaurants and public venues will remain closed until at least 1 July.
• Our analysis shows the manufacturing and construction sectors could be prioritised as part of the “return to work” strategy, on the basis these sectors are associated
with a relatively low infection risk, and there could also be a material economic uplift from increasing business activity through supply chain effects. This finding appears to be
consistent with the UK Government’s announcement encouraging workers that cannot work from home to travel to work from 13 May, for example in sectors such as
manufacturing, construction, distribution and logistics, and scientific research. However, these factors should be considered alongside other factors, such as access to personal
protective equipment and regional considerations.
• Ongoing economic uncertainty continues to put pressure on business turnover and investment: According to the Bank of England (BoE)’s Decision Maker Panel (DMP)
Survey, businesses expect their sales to be around 45% lower than normal in 2020 Q2 and business investment 50% lower relative to a pre-COVID baseline. This is consistent
with the results from an ONS business survey carried out between 6-19 April that showed 58% of businesses that were still in operation had seen their turnover decrease from
pre-crisis levels. Of this group, around two-fifths of businesses experienced a decline in turnover in excess of 50%.
• Business demand for credit will likely increase as firms seek additional liquidity to address cash-flow shortages. According to the BoE’s DMP survey, around two-thirds of
businesses reported an increase in demand for credit in Q2, but around 10% of businesses thought they would not be able to get additional credit. There are signs financial
conditions have tightened, but this is somewhat mitigated by the credit and loan guarantee schemes put in place by the BoE and Treasury. The BoE also decided last week to
maintain the current stance of monetary policy, with the Bank Rate remaining at 0.1% and a continuation of the £200bn government bond purchasing programme, which will likely
contribute to easing the pressure on credit conditions.
• We have not made any changes this week to our illustrative COVID-19 scenarios for the UK economy for the time being, which make differing assumptions on the speed
and extent of the easing of the lockdown over the coming months. Our estimates for GDP growth in 2020 range from around -5% to -10%. More recent survey data points to a
steeper economic decline towards the lower end of this range. This should then be followed by a gradual recovery in 2021, although the level of GDP may still be around 1.5% to
4% below pre-crisis trends by the end of next year.
UK Economic Update 13 May 2020
PwC 2
Contents 1. This week’s data 4 2. UK GDP scenarios 13 3. UK public finance scenarios 19 4. UK sector impacts 24 5. The workforce 29 6. Returning to work: A sector-based approach 34 Annex – methodological details 37 UK Economic Update 13 May 2020 PwC 3
This week’s data
The UK has announced a phased lockdown exit strategy
On 11 May, the Government published the strategy for lifting lockdown measures in England, and signalled a modest
relaxation to social distancing rules from 13 May, to allow people to leave their homes multiple times per day, and for
employees that cannot work from home to return to work following social distancing rules and avoiding public transport where
possible. Other measures will stay in place, meaning restaurants and public venues will remain closed until at least 1 July.
Policy measure When? Description
Industries where employees cannot work from home such as manufacturing, construction, logistics and
Return to work for industries that
13 May distribution will be able to return to work, but will have to abide by social distancing rules and avoid public
can’t work from home
transport where possible. Other workers should continue to work from home if they can.
People will be allowed to exercise
13 May People are allowed to exercise more frequently, without limits on the number of times per day.
more often
People will be able to meet other
13 May People will be allowed to meet people from different households in parks so long as they stay two metres apart.
people in parks
Return to school for vulnerable Local authorities and schools have urged more vulnerable children and children of key workers to return to
13 May
children & those of key workers. school. There is a large societal benefit for the return of these children to school.
14-day quarantine for travellers on Apart from arrivals from the Republic of Ireland and France, individuals arriving into the UK will be required to
31 May
international arrivals self-isolate for 14 days at a private residence, and provide an address when they arrive at the border.
No earlier
Return to school for some children Primary schools in England to start reopening in stages, beginning with Reception, Year 1 and Year 6 classes.
than 1 June
No earlier Some businesses (most likely retailers and non-food businesses) will be allowed to reopen, but will have to abide
Phased reopening of some shops
than 1 June by social distancing measures to prevent further virus spread.
Planned reopening of restaurants, No earlier Conditional on appropriate scientific evidence that it is safe to ease the lockdown, hospitality and leisure
pubs & other public places than 1 July businesses will reopen while enforcing social distancing rules.
Source: UK Government - Our plan to rebuild: The UK Government’s COVID-19 recovery strategy, 11 May 2020
UK Economic Update 13 May 2020
PwC 5
Comparison of 2020 Q1 GDP growth figures
China saw a significant decline in economic activity as a result of the lockdown starting in late January. However, even for
countries that implemented widespread social distancing measures only in March, the measures represented an almost
unprecedented shock to economic activity, ranging from -4.7% to -5.8% in Italy, Spain and France. Overall Eurozone GDP is
estimated to have fallen by 3.8% in Q1 of 2020, the sharpest drop since records were first compiled in 1995. The US
economy shrank by around nearly 5%, its largest decline since the financial crisis.
GDP growth in Q1 2020 (% change compared to previous quarter – non-annualised)
China France Spain US Italy Eurozone
-3.8%
-4.8% -4.7%
-5.2%
-5.8%
-9.8%
Source: US Bureau of Economic Analysis, China National Statistics Bureau, Eurostat
UK Economic Update 13 May 2020
PwC 6UK business activity falls sharply in April, particularly in services
The final result for the purchasing managers’ index (PMI) data for April shows the COVID-19 outbreak has had a significant
impact on UK business activity. For services in particular, the PMI signalled the fastest ever decline in business activity due to
the lockdown. The manufacturing sector was also hit, but less severely compared to services activity (although the
manufacturing output index alone fell by more to 16.6, with the headline index being distorted by delivery time effects).
April 2020
Purchasing Managers’ Indices of business activity
Services: 12.3
70 Manufacturing: 32.9
60
50
40
30
20
10
Oct-2007
Oct-2008
Oct-2009
Oct-2010
Oct-2011
Oct-2012
Oct-2013
Oct-2014
Oct-2015
Oct-2016
Oct-2017
Oct-2018
Oct-2019
Apr-2007
Jul-2007
Apr-2008
Jul-2008
Apr-2009
Jul-2009
Apr-2010
Jul-2010
Apr-2011
Jul-2011
Apr-2012
Jul-2012
Apr-2013
Jul-2013
Apr-2014
Jul-2014
Apr-2015
Jul-2015
Apr-2016
Jul-2016
Apr-2017
Jul-2017
Apr-2018
Jul-2018
Apr-2019
Jul-2019
Apr-2020
Jan-2007
Jan-2008
Jan-2009
Jan-2010
Jan-2011
Jan-2012
Jan-2013
Jan-2014
Jan-2015
Jan-2016
Jan-2017
Jan-2018
Jan-2019
Jan-2020
Services Manufacturing
Source: IHS Markit / CIPS
UK Economic Update 13 May 2020
PwC 7Uncertainty about UK and global growth has impacted investment
The uncertainty about the outlook for the UK and global economy has had a significant impact on business investment.
According to the Bank of England (BoE) Decision Maker Panel (DMP) Survey, businesses expect their sales to be around
45% lower than normal in 2020 Q2 and business investment 50% lower relative to a pre-COVID baseline. Sectors directly
affected by the lockdown (such as hotels and restaurants) or where it is difficult for employees to work from home, such as
real estate and construction, are expected to be worst hit.
Average expected impact of COVID-19 on business investment & sales in 2020 Q2
Accom & Food Investment Sales
Real Estate
Construction
Wholesale & Retail
Transport & Storage
Health
Manufacturing
Other Services
Finance & Insurance
Info & Comms
Prof & Scientific
Admin & Support
Other Production
Total
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Decline in investment / sales relative to pre-COVID baseline
Source: Bank of England Monthly Decision Maker Panel (DMP) data - April 2020
UK Economic Update 13 May 2020
PwC 8UK business turnover continues to come under severe pressure
The final results from wave 3 of the ONS’s Business Impact of Coronavirus Survey carried out between 6-19 April showed
58% of businesses that were still in operation had seen their turnover decrease from pre-crisis levels. Of this group, around
two-fifths of businesses experienced a decline in turnover in excess of 50%.
The preliminary results from this survey were previously reported in our 6 May update. These figures have been revised following final data revisions made by the ONS.
Financial performance, percentage of all responding businesses continuing to trade, UK, 6-19 April
Turnover increased
Turnover Increased by more than 50% 0.6%
Turnover Increased between 20% and 50% 1.0%
Turnover Increased by up to 20% 1.7%
Turnover Affected but within normal range 2.5%
Financial performance unaffected 29.8%
Turnover decreased
Turnover Decreased by up to 20% 13.7%
Turnover Decreased between 20% and 50% 20.4%
Turnover Decreased by more than 50% 23.4%
Not Sure 6.9%
0% 5% 10% 15% 20% 25% 30% 35% 40%
Source: ONS - Business Impact of Coronavirus Survey
UK Economic Update 13 May 2020
PwC 9Demand for credit by businesses is expected to increase in Q2
Business demand for credit has increased as firms seek additional liquidity to address cash-flow shortages. According to the
Bank of England’s DMP survey, around two-thirds of businesses reported an increase in demand for credit in Q2, but around
10% thought they would not be able to get additional credit. This appears consistent with the recent tightening of global
financial conditions (see chart on right), however the availability of credit is being supported by a range of financing facilities.
UK Finance data shows around £5bn has been lent to SMEs as part of the Coronavirus Business Interruption Loan Scheme.
Expected impact of COVID-19 on firm’s demand for credit in Global financial conditions index
2020 Q2, % of respondents
7
Difference from average (no. of standard
More credit 6
5
Expect credit to be available Expect credit to be unavailable 4
deviations)
3
No material impact
2
1
0
Less credit
-1
-2
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Source: Bank of England – BankStats tables, Monetary Policy Report May 2020
UK Economic Update 13 May 2020
PwC 10Net consumer credit lending has declined
The introduction of social distancing measures have restricted consumer spending, thus reducing demand for consumer
credit. Data from the Bank of England shows net consumer credit lending volumes declined sharply in March as repayments
exceeded gross new lending. The temporary suspension of property transactions and the increase in demand for mortgage
payment holidays, coupled with uncertainty on house prices have reduced the availability of mortgage products.
Net consumer credit lending (seasonally adjusted)
3,000 £ billions Credit card lending Other lending Total
2,000
1,000
0
-1,000
-2,000
-3,000
-4,000
2016 2017 2018 2019 2020
Source: Bank of England – BankStats tables, excludes dealership car finance
UK Economic Update 13 May 2020
PwC 11Many UK businesses have applied for government support
The Coronavirus Job Retention Scheme (JRS) which went live on 20 April, has been the most popular COVID-19 government
support scheme so far with over 6 million workers furloughed. 67% of businesses that are continuing to trade or who have
temporarily paused or ceased trading, have applied to the JRS. Government-backed business loan schemes have been
much slower to take off, though lending is gradually picking up in response to reforms of these schemes.
% of businesses either continuing to trade or who have temporarily paused or ceased
trading, broken down by government support, UK, 6-19 April 2020
Coronavirus Job Retention Scheme 67.2%
Deferring VAT payments 56.4%
Business rates holiday 27.4%
HMRC Time To Pay scheme 22.3%
We have not applied for any of these initiatives 20.7%
Government-funded small business grant or loan schemes 11.2%
Accredited finance agreements 9.9%
Source: ONS - Business Impact of Coronavirus Survey
Note: *Bars will not sum to 100% as businesses could select multiple schemes
UK Economic Update 13 May 2020
PwC 12UK GDP scenarios
Potential COVID-19 scenarios to inform crisis planning
Our illustrative COVID-19 scenarios reflect a range of likely outcomes following the UK government’s proposed phased
approach to lifting the lockdown restrictions that are currently in place. Both of these scenarios assume a continuation of some
elements of the lockdown over the coming months, but for varied periods and at varying levels of intensity. The subsequent
trajectory of the disease is dependent on the success of the implementation of these NPIs, whether they need to be re-
imposed, and the introduction of other NPIs or pharmaceutical interventions at a later date (i.e. treatment drugs or vaccines).
SMOOTH EXIT BUMPY EXIT
1 Gradual lifting of NPIs does not result in a significant second peak 2 Lifting of NPIs results in a second peak in cases, requiring NPIs to
of disease. Cases continue to occur at a lower level. be reintroduced to bring cases back to a lower level.
Assume vaccine Assume vaccine
New cases per week
New cases per week
available – June available – June
2021 2021
2020 2021 2022 2020 2021 2022
Assumptions*: Assumptions*:
• Following an initial peak in April 2020, successful implementation of NPIs including testing, • Following an initial peak in April 2020, successful implementation of NPIs including testing,
contact tracing, quarantine and physical distancing results in the effective reproduction rate contact tracing, quarantine and physical distancing results in the effective reproduction rate
remaining at or below one, and therefore the number of cases reducing to a lower level. remaining at or below one, and therefore the number of cases reducing to a lower level.
• NPIs are lifted in a gradual, phased way from late May 2020 onwards. • NPIs are lifted in a gradual, phased way from late May 2020 onwards. However, this has the
• Significant testing and contact tracing will be necessary to track and control outbreaks as pre- effect of increasing the reproduction number to above one, causing a further peak in cases.
symptomatic and mild cases prevent complete containment of the virus until a vaccine NPIs may be introduced and reversed in a cyclical way to control subsequent outbreaks.
becomes available. • Significant testing and contact tracing will be necessary to track and control outbreaks as pre-
symptomatic and mild cases prevent complete containment of the virus until a vaccine
Timeframe: becomes available.
• Peak: April 2020 Timeframe:
• Total duration: 12 to 18 months (until a vaccine is available). • Peak: April 2020 (with second smaller peak later in 2020)
• Total duration: 12 to 18 months (until a vaccine is available).
Note: *Our scenarios assume the UK moves to a comprehensive free trade agreement with the EU on 1 January 2021, but there are still uncertainties surrounding this assumption.
UK Economic Update 13 May 2020
PwC 14COVID-19 economic impact transmission channels
For our alternative scenarios, we modelled five main transmission channels through which COVID-19 could impact the UK
economy (the first four negative, with an offsetting positive effect from monetary and fiscal policy reactions). Other reinforcing
and mitigating impacts are possible, so this is not an exhaustive list.
1. Supply 2. Labour 3. Uncertainty 4. Sector 5. Policy
chain supply impacts partial or full reactions
disruption reduction lockdowns
• Major disruption • Social distancing • Consumers defer major • Significant periods of • Extensive working
reduces demand measures see non- purchase decisions and travel disruption, capital / cashflow
throughout the supply essential workers defer discretionary closures of most retail support to businesses
chain, affecting working from home for spend. outlets (except grocery through tax / payment
suppliers. Businesses an extended period, or and pharmacy), leisure; holidays, grants and
scale back production or workers staying at home • Significantly reduced hospitality; sports and loan guarantees.
adapt supply chains to to care for children or levels of business and entertainment venues.
alternative sources. other dependents. consumer confidence • Fiscal support for
results in a sharp and • Other non-essential healthcare service.
• Significant proportion of • Focus on maintaining sustained downturn in sectors may see full or
the workforce becomes workforce in essential business investment. partial lockdowns due to • Looser monetary policy
unavailable for work and roles only. practical difficulties in stance through interest
production facilities can’t • Investment focuses on operating with adequate rate cuts combined with
maintain output of basic infrastructure and social distancing. additional quantitative
materials and unfinished facilities to counter the easing (QE) and other
goods. pandemic and measures to boost
investment in digital credit flows to business.
ways of working (or new
delivery models).
UK Economic Update 13 May 2020
PwC 15Illustrative scenarios for short-term impact on UK GDP
Our COVID-19 economic scenarios to reflect a range of likely outcomes on the lifting of lockdown restrictions that are
currently in place. Our estimates for GDP growth in 2020 range from around -5% to -10%.
Our analysis suggests that UK GDP growth could range between around -5%
and -10% in 2020, given we expected growth of around 1% before COVID-19
and the estimated impacts of the outbreak in the table below, which are from
around -6% to -11% in the first year. Figures below are only illustrative of broad First year UK GDP impact across COVID-19 scenarios
orders of magnitude and should not be taken as forecasts or predictions. See the Smooth exit Bumpy exit
technical annex for more detail on assumptions. 0 Supply chain
-2 Labour supply
Year one impact (%) on UK GDP Scenarios
relative to baseline without COVID-19 Uncertainty- consumer
Smooth exit Bumpy exit -4 expenditure
1. Supply chain -0.7 -1.2 Uncertainty- investment
-6
2. Labour supply -2.1 -2.4 Sector lockdowns
3a. Uncertainty – consumer -8
Net position after monetary
expenditure -1.3 -2.6 and fiscal response
-10
3b. Uncertainty – business
investment -1.3 -2.3 -12
Fiscal: 2.1 Fiscal: 2.1 Government
4. Policy response
Monetary: 1.0 Monetary: 1.3 -14 support schemes
prevent far worse
5. Sector partial lockdowns -3.6 -6.0
-16 % impact on 2020 GDP relative to outcomes
Overall UK economic impact -5.9 -11.1 baseline without COVID-19
UK Economic Update 13 May 2020
PwC 16UK GDP will drop sharply in Q2 2020, but should recover later
It is clear the COVID-19 crisis will lead to a sharp fall in GDP in Q2 2020, perhaps by around 12% to 16% - much larger than
any quarter during the 2008-09 financial crisis. This is driven by the unprecedented nature of the lockdown, as well as lower
consumer spending and business investment due to more standard confidence and income effects. There should then be a
recovery as and when the lockdown eases, although the pace of this remains highly uncertain. We estimate in our two
scenarios that output could be back to around 1.5% to 4% below its pre-crisis trend by the end of 2021 (see chart).
UK GDP index (Q4 2019 = 100), quarterly levels in each scenario Commentary
105 ● In the ‘Smooth exit’ and ‘Bumpy exit’
scenarios, GDP could contract between 12%
and 16% quarter-on-quarter in Q2 2020.
UK Real GDP Index (Q4 2019:100)
100 ● This compares to a contraction of around 2.1%
in Q4 2008 at the height of the global financial
crisis, or a 2.7% quarter-on-quarter decline at
95 the peak of the 1974 recession.
● We assume output would then recover
Smooth exit relatively quickly at first as lockdowns are
90 Bumpy exit eased, followed by a more gradual pace of
Baseline recovery as economic life slowly returns to
normal. The recovery is longer under the
85 ‘Bumpy exit’ scenario due to larger scarring
effects and the temporary re-imposition of
social distancing measures in this case.
80 ● The pace of the recovery remains highly
2019 2019 2019 2019 2020 2020 2020 2020 2021 2021 2021 2021 uncertain, but we assume this involves the
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
level of GDP returning to only around 1.5% to
Quarter
Source: ONS, PwC analysis 4% below pre-crisis trend levels by the end of
2021. But other outcomes are clearly possible
UK Economic Update 13 May 2020
PwC
if the crisis lasts for longer. 17PwC’s economic growth scenarios compared to other analyses
Our GDP growth scenarios for 2020 are less negative than the recent illustrative projections by the OBR predicting a 13% fall
in 2020. The OBR assumes a very sharp 35% drop in Q2 2020. Similarly, the Bank of England’s most recent forecasts for the
UK assume a quarterly decline of over 20%, with growth in 2020 averaging at -14%. Both the latest IMF forecast for the UK
and consensus forecasts as surveyed by the Treasury in April are more comparable with our ‘Smooth exit’ scenario, but are
more optimistic in comparison to our ‘Bumpy exit’ scenario.
Comparison of 2020 GDP projections and scenarios Commentary
● The Office for Budget Responsibility (OBR)
-4.8% PwC - 'Smooth exit' scenario published illustrative projections on the impacts
of COVID-19 on UK economic output on 14
April. They estimate that 2020 Q2 GDP could
-5.8% Consensus forecasts* (16 Apr) fall by as much as 35% compared to the
previous quarter and by around 13% in 2020
-6.5% IMF (14 Apr) as a whole despite a strong recovery later in
the year.
● Similarly, the Bank of England anticipates a
-10.0% PwC - 'Bumpy exit' scenario significant decline in Q2, followed by a material
pick up in activity later in 2020 that continues
into 2021, when the economy recovers to its
-12.8% OBR (14 Apr)
pre-COVID level in the second half of 2021.
● IMF and consensus forecasts project more
-14.0% Bank of England (7 May) moderate falls in GDP in 2020, but also some
longer term scarring effects as we do. But all
such projections are subject to large
*HMT comparison of independent forecasts (April 2020) – average of new forecasts made in last month
Source: PwC, OBR, IMF, HMT, BoE
uncertainties and can only be illustrative at
present.
UK Economic Update 13 May 2020
PwC 18UK public finance scenarios
Direct cost of fiscal measures to combat COVID-19
We have revised our estimates of the impact of fiscal measures on public finances in line with our revised COVID-19 scenarios.
The Treasury, working closely with the Bank of England, has responded to the COVID-19 crisis with direct fiscal support
measures totalling around £75bn to £110bn in 2020/21 in our two scenarios. But many measures are temporary so costs should
be much lower at only around £20bn to £30bn in 2021/22, assuming the crisis ends next year as assumed in both scenarios. The
assumptions behind this and other fiscal analyses in this section are described further in the annex at the end of this report.
Estimated cost of direct fiscal support measures in alternative scenarios (£bn) Commentary
120 ● Our previous fiscal analysis (first published on
15 April based on modelling the previous
week) assumed a direct fiscal support of
100 around £60bn to £80bn in our two scenarios.
● We have revised the estimated cost of the
Estimated cost (£bn)
80
Other measures fiscal stimulus package upwards to account for
the higher cost likely to be associated with the
60 Job retention and self-employment Coronavirus Job Retention Scheme in light of
support more recent data on business take-up, as well
Benefit increases as estimated cost of newly announced policies
40 over the past two weeks. Note that this
Other Budget 2020 Covid-19 measures analysis has not been updated to reflect the
20
extension of the Coronavirus Job Retention
NHS emergency fund Scheme until October 2020.
0
2020/21 2021/22 2020/21 2021/22
Smooth exit Bumpy exit
Source: PwC estimates based on data from OBR, Treasury and IFS
UK Economic Update 13 May 2020
PwC 20The budget deficit will rise sharply in 2020/21, but should then fall back
Our revisions to the cost of the fiscal support package as well as our new lower economic growth scenarios imply a sharp rise
in the budget deficit in 2020/21 to around £210-315bn, or around 10% to 15% of GDP, as compared to 10% in 2009/10 after
the financial crisis. But we expect much of this rise will reverse in 2021/22, with the deficit coming down to around 4.5% to 7%
of GDP. This would still be above the 3% of GDP ceiling implied by current fiscal rules, so some longer term fiscal tightening
may be needed after full recovery has been achieved. But that is a matter to decide after the crisis.
Annual budget deficit (£bn) Annual budget deficit (as % of GDP)
350 18%
315
16% 15.4%
300
14%
250
212 12%
9.8% 'Bumpy exit' scenario
200 'Bumpy exit' scenario 10%
163
'Smooth exit' scenario 8% 7.1% 'Smooth exit' scenario
150
112
Pre-crisis baseline (OBR 6% 4.7%
forecast)
Fiscal rule ceiling = 3%
100 GDP
4%
Pre-crisis baseline
50 67
49 55 2% 2.8% (OBR forecast)
2.2% 2.4%
0 0%
2019/20 2020/21 2021/22 2019/20 2020/21 2021/22
Source: OBR for pre-crisis baseline, PwC for alternative scenarios Source: OBR for pre-crisis baseline, PwC alternative scenarios
UK Economic Update 13 May 2020
PwC 21Impact on public debt to GDP ratios in alternative scenarios
In our ‘Smooth exit’ scenario, public debt might stabilise at around 80% of GDP in 2021/22, so in this case there should be no
major threat to longer term fiscal sustainability. But the debt profile looks less sustainable in a ‘Bumpy exit’ scenario as that
may be associated with a larger permanent loss of GDP and, hence, of tax revenues. In that less favourable case, there may
be a need for future tax rises or renewed spending restraint in the longer term, but only once we are well passed the end of
the current crisis. Bank of England action means there is no problem with the government borrowing more for now.
Public sector net debt, excluding contribution from Bank of England schemes (% GDP) Commentary
95% ● Our estimates of the debt-to-GDP ratio have
been revised from our previous 15 April update
to match our new budget deficit and GDP
89%
90% scenarios. We also exclude the impact on debt
of the Bank of England’s schemes (such as the
85% Term Funding Scheme), which provides a
85% 'Bumpy exit' scenario better indication of underlying trends in the
81% debt to GDP ratio.
79%
80% 'Smooth exit' scenario ● The government clearly needs to borrow much
more in the short term to help soften the
75% economic blow from the crisis. So the debt-to-
72% 72% 72% Pre-crisis baseline (OBR forecast) GDP ratios will rise, particularly in a ‘Bumpy
exit’ scenario. Recent successful gilt auctions
70% show the markets are happy to buy significant
additional amounts of UK government debt at
current record low yields.
65%
● This reflects the fact the Bank of England has
60% pledged to buy at least an extra £190bn (c.8%
2019/20 2020/21 2021/22 GDP) of gilts, and more if needed, which offers
considerable support to the market. In the
Source: OBR for pre-crisis baseline, PwC for alternative scenarios short term, the government can also call on
temporary cash flow financing through
UK Economic Update
expanding its ‘overdraft’ at the Bank of 13 May 2020
PwC England. 22OBR anticipates a larger budget deficit than during the financial crisis
According to an illustrative reference scenario published by the OBR on 14 April, COVID-19 could cause the largest single-
year deficit in public sector net borrowing since the Second World War, rising to nearly 14% of GDP in 2020-21. Our revised
estimates of the budget deficit in alternative scenarios (10-15% of GDP) are now broadly in line with the OBR’s analysis, but
we do not expect as sharp a fall in the deficit in 2021/22 as we assume some longer term scarring effects on the economy.
OBR public sector net borrowing: reference scenario versus Budget forecast (% GDP) Commentary
Outturn Budget 2020 forecast Reference scenario ● The OBR’s illustrative scenario suggests that
30 compared to their 2020 Budget forecast of
WWI / Spanish
WWII £55bn, there could be a £218bn increase in net
flu borrowing, bringing the total to £273bn in
25 2020-21. This reflects the cost of various
schemes which the government have
20 introduced as well as the impact of the
lockdown on the economy and so on tax
Percent of GDP
Financial crisis
revenues and benefit spending.
15
● This means that COVID-19 could have the
largest impact on public borrowing since the
10 Second World War: the OBR estimates that
the deficit could reach 14% of GDP in 2020-21.
5 ● The budget deficit is projected to fall quickly in
2021-22 as lockdown measures are lifted and
0 the economy recovers. But the OBR
assumptions, while very negative for Q2 2020,
appear rather optimistic in the medium term.
-5
1908 2019 2024
-09 -20 -25
● The OBR also estimates that every additional
Source: ONS, Nomis: DWP; Stat Xplore; Work and Pensions Select Committee hearing, Resolution Foundation month spent in lockdown could add add £35bn
to £45bn to the deficit (which is similar to our
UK Economic Update
own estimates). 13 May 2020
PwC 23UK sector impacts
We use an input-output approach to assess sector impacts
We use UK input-output (I-O) tables to model the sectoral economic impact of COVID-19 through three main channels: the
direct impact on gross value added (GVA)* due to sector lockdowns and labour supply disruption; the supply chain spend
impact (indirect impacts through the supply chain); and the employee spend impact (induced impacts as a result of lower
household incomes and so lower consumer spending).
A simplified representation of the relation between Covid19’s
The relationship between the three levels of economic A simplified representation
direct impact of thethrough
and its impacts relation the
between COVID-19’s
supply chain
contribution direct impact and its impacts through the supply chain
£xm
The image part with relationship ID rId7 was not found in the file.
1 Direct
Initial demand shock
Employment
Gross Value added Employee
Supplier
Wages Profit spending of £xm £xm £xm
expenditure
wages
(construction (financial (distribution
contractor) services provider) network provider)
2 Indirect 3 Induced
Supply chain spend Employee spend
Employment Employment £xm £xm £xm
Gross Value added Gross Value added Suppliers to Suppliers to the financial Suppliers to the distribution
construction contractor services provider network provider
Wages Profit Wages Profit
Extended supply chain
*Note: GVA is broadly the sectoral version of GDP
UK Economic Update 13 May 2020
PwC 25Our estimates show biggest impacts for food service, hotels and transport
Our sectoral analysis shows that the industries likely to experience the greatest short term economic impact are food service
(e.g. restaurants and pubs), hotels, leisure and transport. In our ‘Smooth exit’ scenario, we estimate reductions of around
14% to 20% in annual 2020 GVA in these sectors relative to a baseline without COVID-19. In our ‘Bumpy exit’ scenario, these
sectors could suffer a negative impact on GVA of around 26% to 37% in 2020. There would be some offsetting gain in
healthcare and other public sector activity levels, but not enough to prevent a significant negative impact on total UK GDP.
Range of estimated GVA impact by sector – ‘Smooth exit’ vs ‘Bumpy exit’, % impact on
2020 GVA relative to baseline without COVID-19 Commentary
Food service -20% to -37% ● Our sector scenario impacts have been
Hotels -18% to -34% % impact on 2020 revised in line with our changes to our GDP
Leisure and arts -15% to -28% GVA relative to scenarios as described in Section 2 above.
Transport -14% to -26% baseline without
Construction -12% to -22% COVID-19 ● The I-0 approach helps identify points of most
negative impact, including supply chain effects.
Real estate -10% to -18%
Retail and wholesale -9% to -17% ● These impacts stem largely from demand-side
Manufacturing -9% to -16% effects, and we assume that the economy re-
Logistics -6% to -11% allocates labour to where it is needed (e.g.to
UK average -6% to -11% food retail away from non-food retail).
Professional and technical services -5% to -9%
Finance and insurance -4% to -7% ● Our analysis also implicitly assumes that policy
Information and Telecoms -4% to -7% action is sufficient to prevent a very large wave
Utilities -3% to -5% of corporate insolvencies (though there are
Education -2% to -3% bound to be some in practice).
Public Admin, Defence 2% to 3%
Health and social care 3% to 6%
Bumpy exit Smooth exit
Source: PwC Economics analysis, ONS
UK Economic Update 13 May 2020
PwC 26COVID-19 sector impacts vs 2009 financial crisis
The potential scale of the annual GDP impact under even our ‘Smooth exit’ scenario could be larger than the experience of
2009 due to the global financial crisis, with the impact of COVID-19 being significantly larger for locked-down sectors. During
the financial crisis, by contrast, businesses were still able to maintain some cash flow to support operations. However, the
scale of government support has also been much greater this time around, which mitigates some of the difference. In our
Bumpy exit scenario, the larger impacts in 2020 vs 2009 would be further increased.
Sectoral GDP impacts in the smooth exit scenario in 2020 vs actual 2009 annual impacts
Food service
Hotels
Leisure and arts
Transport
Construction
Real estate
Retail and wholesale
Manufacturing
Logistics
UK average
Professional and technical services
Finance and insurance
Information and Telecoms
Utilities
Education
Public Admin, Defence
Health and social care
-25% -20% -15% -10% -5% 0% 5%
COVID-19 Smooth exit 2009 GFC
Source: PwC Economics analysis, ONS
UK Economic Update 13 May 2020
PwC 27Businesses’ trading status by sector
A business survey conducted by the ONS from 6-19 April showed that around 23% of businesses had temporarily closed or
paused trading. More businesses have ceased or paused trading than have continued trading in the accommodation and food
services, and the arts, entertainment and recreation sectors. At the other end of the spectrum, nearly all professional services
businesses were continuing to trade during this time period, as well as the information and communication sector.
Trading status, all responding businesses, broken down by industry, UK, 6-19 April 2020
Continuing to trade
Professional Scientific And Technical Activities
Has temporarily closed or paused trading
Information And Communication
Human Health And Social Work Activities
Administrative And Support Service Activities
Transportation And Storage
Water Supply Sewerage Waste
Management And Remediation Activities
Education
Manufacturing
All Industries*
Wholesale And Retail Trade; Repair
Of Motor Vehicles And Motorcycles
Construction
Arts Entertainment And Recreation
Accommodation And Food Service Activities
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Source: ONS - Business Impact of Coronavirus Survey
Note: *Some sectors haven’t been included due to their low response rate, but are included for ‘All industries’. Bars will not sum to 100% as those businesses that have permanently ceased trading (less than 1%) are not included in the graph.
UK Economic Update 13 May 2020
PwC 28The workforce
Home working productivity comparison by income group Our latest PwC Research survey (16-19 April) asked a representative sample of around 600 currently employed UK workers whether the nature of their work allowed them to work from home. In aggregate, around 60% of workers are able to work from home, but this was not evenly distributed across income levels. While 70% of high income earners (>£50k) could work from home, only around 40% of low income earners (
COVID-19 impacts on employment status by UK region
Our survey (conducted 16-19 April) also shows workers in the North East of England were most likely to have become
unemployed or furloughed compared to other UK regions, followed by the South East and Wales. In comparison, just 17% of
respondents living in London were furloughed, but London also has a relatively high proportion of workers where their hours
have been reduced. Our survey cannot, however, pick up the considerable variation likely to have been seen within regions.
This will require targeted support for local areas that are particularly reliant on hard-hit sectors such as tourism.
Impact on employment status due to COVID-19, by UK regions, 16-19 April 2020
100%
90%
80%
70%
60% I have become employed
50% I am still working my usual hours
40% I am still employed, but on reduced hours
30% I have been furloughed (but remain employed)
I have become unemployed
20%
10%
0%
North East South East Wales East West South Northern East of Yorkshire London Scotland North West
Midlands Midlands West Ireland England and the
Humber
Source: PwC Research
UK Economic Update 13 May 2020
PwC 31Universal credit claims remain high, but new claims have slowed
Between 16 March and 28 April, the Department for Work and Pensions (DWP) received a total of 2.4 million individual claims
to Universal Credit. The weekly number of new claims now appears to be in decline since peaking at the end of March,
possibly due to the support measures announced by the government (notably the Job Retention Scheme). However, there is
still likely to be a large rise in unemployment over the next few months, as reflected in recent projections by the OBR and
other forecasters.
Weekly new claims* to Jobseeker’s Allowance and Universal Credit: GB
700k
633k
600k
533k
500k
400k
400k
+955%
300k +789%
245k 242k
+567% 191k
200k
112k +308% +303%
82k +78% +218%
100k 60k 75k
46k +26% +87%
0k
Feb ‘08 Feb ‘09 March ‘19 10 Mar ‘20 17 Mar ‘20 24 Mar ‘20 31 Mar ‘20 7 Apr ‘20 14 Apr ‘20 21 Apr ‘20 28 Apr ‘20
Jobseeker’s Allowance Universal Credit
Source: ONS, Nomis: DWP; Stat Xplore; Work and Pensions Select Committee hearing, Resolution Foundation
Note: JSA figures have been adjusted to weekly. JSA and UC figures are not directly comparable.
*Our claim figures are reflective of the declarations made to UC as reported by DWP. There are methodological differences that may cause this claim figure to be higher than what will be presented in official statistics.
UK Economic Update 13 May 2020
PwC 32Furloughed workers by industry
According to a business survey by the ONS conducted between 6-19 April, 28% of the UK workforce have been furloughed
by their employers, of which the accommodation and food services and arts and entertainment industries saw the highest
proportions, with 73% and 70% respectively furloughed. Other services sectors less affected by the lockdown or able to cope
with home-working have seen far fewer employees furloughed.
% of workforce furloughed by industry (businesses either temporarily closed or paused
trading or continuing to trade, UK, 6-19 April 2020
Accommodation And Food Service Activities
Arts Entertainment And Recreation
Construction
Transportation And Storage
Administrative And Support Service Activities
Manufacturing
All Industries*
Wholesale and Retail Trade; Repair Of Motor
Vehicles And Motorcycles
Water Supply, Sewerage, Waste Management
and Remediation Activities
Professional Scientific And Technical Activities
Information And Communication
Human Health And Social Work Activities
Education
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Source: ONS - Business Impact of Coronavirus Survey
Note: *Some sectors haven’t been included due to their low response rate, but are included in ‘All industries’. The bars will not sum to 100% because of the apportionment by employment size.
UK Economic Update 13 May 2020
PwC 33Returning to work: A sector-based approach
Our Return to Work Index assesses the risks and benefits of returning to work
The Government’s strategy for lifting lockdown measures in England encouraged workers that cannot work from home to
travel to work from 13 May, for example in sectors such as manufacturing, construction, distribution and logistics, and
scientific research - while abiding by social distancing rules and avoiding public transport where possible. To support an
assessment of how this approach could be implemented, we developed a Return to Work Index using a range of economic
and risk indicators to quantify each sector’s economic contribution and the health risk from returning employees to work.
Questions to answer Methodology
PwC Return to Work Index
Economic Risk
Normalise
1 2
Calculate
economic score
Indicators are standardised Economic score is
using the z-score method,
based on the mean and
Calculating combination of sector GVA,
productivity and Covid-19
standard deviation of the 62 the PwC economic impact. This is
sectors to enable
• GVA: The higher the
• Commute: The higher the share of
comparability Return to scaled such that the score of
top sector = 50.
workers not using public transport, the
economic impact of Work Index
3 4
lower the risk of transmitting COVID-
relaxing the restrictions
19, and the higher the index score.
of a sector, the higher the
index score. Higher • Workplace sparsity: Sectors with Calculate risk scores Scale the index
productivity sectors lower levels of face to face interaction Two risk scores from public Scores are combined to
produce higher economic with workers and customers have a commuting independence values between 0 and 100.
benefit for the same level lower chance of COVID-19 and workplace sparsity. Both
of risk. transmission. The higher the sparsity, are scaled such that the
the higher the risk index score. score of the top sector = 25.
UK Economic Update 13 May 2020
PwC 35Sectors that could be prioritised for the return to work strategy
Our analysis shows that the manufacturing and construction sectors could be prioritised as part of the “return to work”
strategy, on the basis that these sectors are associated with a relatively low infection risk, and there could also be a material
economic uplift from increasing business activity through supply chain effects. However, these factors should be considered
alongside other factors, such as access to personal protective equipment and regional considerations. For example, different
parts of the country may have varying levels of transport use, vulnerable populations and available healthcare capacity.
PwC Return to Work Index: Economic factors vs. Risk factors Commentary
Lower economic impact - Higher economic impact
Lower risk - Lower risk
Agriculture
● Our analysis shows construction and
Processing
of raw manufacturing could be prioritised for return to
materials Manufacturing work based on the potential economic uplift
from returning to work, as well as benefitting
Renting/leasing an extensive supply chain.
Insurance
Construction
● However, a sector-based approach to lifting
the lockdown should be considered alongside
a range of other factors, for example, regional
Real estate
differences in work environments, reliance on
Food /beverage public transport, as well as business access to
services personal protective equipment for workers.
Creative arts,
entertainment
Information Motion Air
Water ● For example, Londoners are relatively more
transport
services picture transport dependent on public transport to get to work
compared to workers in other regions.
Lower economic impact - Higher economic impact However, London also has a relatively high
Higher risk - Higher risk concentration of financial and professional
services activity that can also be carried out
remotely.
Source: PwC Economics analysis, ONS
UK Economic Update 13 May 2020
PwC 36Annex – methodological details
UK GDP/GVA scenarios – technical notes and key assumptions
• Annual vs quarterly: this report focuses on estimated impacts on annual • Uncertainty - business investment: We use our previous modelling work to
GDP/GVA in 2020, but these are based on a quarterly model where output falls determine the relationship between UK GDP and business investment. The
sharply in Q2 2020 and then recovers at varying rates in different scenarios later modelling quantified the economic impact of a risk premium shock to total
in the year and in 2021 (see chart on p.14). We assume that the UK moves to a investment and UK GDP using a Computable General Equilibrium modelling
comprehensive free trade agreement with the EU on 1 January 2021. approach. We apply this relationship to a drop in the business investment portion
of total investment to estimate the impact on GDP. The shock to business
• Supply chain assumptions are taken from an academic paper by Luo and Tsang investment was informed by benchmarking to other periods of historic stress and
(2020) who estimate the indirect economic impact to the: a) domestic and b) adjusted for its duration.
global economy due to the Chinese supply chain disruption as a reference point.
We adjust this to reflect the different composition of the UK economy (either due to • Policy response - fiscal: We divide the additional amount the UK government
the manufacturing/services mix or openness to trade compared to the global plans to spend to combat COVID-19 into: a) day-to-day spending; b) additional
average). Finally, we also incorporate any potential adaptation effects for longer spending brought forward; and c) negative tax receipts (i.e. cut in taxes). Each of
lasting scenarios from businesses which switch to alternative suppliers, these spending categories is associated with a fiscal multiplier between 0.6 and 1
dampening this effect. which we obtain from the Office for Budget Responsibility (OBR). We do not
explicitly model the impact of government loan guarantees, though these will help
• Labour supply impacts are assessed in five categories covering workers that to limit downside risks to the economy relative to our two scenarios.
are: a) self isolating; b) infected and not ill; c) infected and ill; d) caring for
dependants; e) not affected by the disease. We assume the first four segments of • Policy response - monetary: We estimate the sensitivity of UK real GDP growth
the workforce lose between 75-100% of their working hours during absence and to changes in monetary policy using Andy Haldane's speech on the impact of
calculate the total number of hours worked lost. We combine this analysis with our monetary policy during the global financial crisis. We assume the monetary policy
calculation of the additional GDP produced per hour of work estimated by UK space available to the Bank of England is consistent with the Governor's
GDP and the average number of hours worked by an employee in the UK in a statement that "We have effectively 200 to 250 basis points of space".
week. In this analysis, we don't take into account the productivity improvements
that could potentially result from adjusting to lower staff levels, or the potential for • Sector lockdown: We use ONS data for the UK's sector and sub-sector outputs.
continued home working by those with only mild symptoms. We assume that output in certain “locked-down” sectors will be depressed for
varying periods of time in the two scenarios. This may include periods of partial
• Uncertainty - consumer expenditure: We benchmark the shock to household lockdown. We do not attempt to model any possible regional or demographic
expenditure with reference to historical crises and period of economic stress. To variations in lockdowns.
derive the economic impact we adjust the expenditure shock based on its duration
and the relative importance of household expenditure to total GDP.
UK Economic Update 13 May 2020
PwC 38Public finances scenarios – our approach and key assumptions
Below we set out further details of the methodology used to develop the public finance scenarios in the report:
• Our baseline was the Budget 2020 forecast by the OBR, which was − Other measures including business rates holiday for some sectors
completed in mid-to-late February 2020 and so included little impact and potential realised government losses on loan guarantees – the
from COVID-19 in the UK, both for the economy and the public finances. latter are hard to quantify but we assume a low loss rate in 2020/21
The later OBR forecast on 14 April was included as a comparator in that builds up over time.
some slides.
− Due to lack of data we do not include the potential impact of tax
• We first estimated the direct cost of the various fiscal stimulus measures deferrals or any offset from possible government spending savings.
announced by the government in the Budget on 10 March and
• We then considered which of these costs might persist in 2021/22 – in
subsequently up to 23 April 2020. This totalled around £75bn to £110bn
general, most are temporary measures but some may continue so we
in 2020/21, including:
estimated the second year cost at around £20bn to £30bn in our two
− Additional emergency NHS funding in the Budget and later scenarios.
− Other Budget 2020 measures, which we costed using OBR • We then added in an estimate of how far the budget deficit might rise in
estimates our alternative economic scenarios, based on a standard Treasury rule
− Increases in Universal Credit and other benefit, estimated to cost of thumb on the relationship between GDP growth and the deficit. This
gave an indirect cost estimate of around £80bn to £150bn in 2020/21 in
£7bn in 2020/21 by Treasury
our two scenarios, falling to around £22bn to £66bn in 2021/22 as the
− The job retention scheme for employees is hard to cost with any economy recovered at different speeds in the two scenarios in 2021.
certainty, but we estimate its cost at around £18-30bn based on a
take-up of around seven million and an average pay-out of around • We then combined these direct and indirect cost estimates with the OBR
£1,200 per month, for varying periods in different scenarios (and baseline forecasts to get estimates of the potential budget deficits in
allowing for offsets from higher income tax and NIC payments). 2020/21 and 2021/22 in our two scenarios, which in turn provided the
basis for estimates of how the public debt stock would evolve. We
− The self-employment support scheme, where we use an IFS cost excluded Bank of England schemes from public debt estimates since
estimate of around £9bn, or £15bn in our bumpy exit scenario. these tend to distort underlying trends in the debt/GDP ratio.
UK Economic Update 13 May 2020
PwC 39PwC Research survey of employment and home working, April 2020
Below we set out further details of the methodology for our home-working survey, issued as part of our weekly Quantibus
survey.
research projects.
• An online survey of 1,000 individuals (representative of the UK population
aged 18 and over) was conducted by the PwC Research team from 16-19 • To support our return to work analysis, we asked two additional questions:
April 2020 to understand some of the impacts of COVID-19. - “Before the COVID-19 situation arose, how many other workers were you
• One of the questions on the survey was about how the employment status of typically physically close to each day (i.e. within a distance of 2 metres)?”
workers had changed since the lockdown began in late March. The results for - “Before the COVID-19 situation arose, how many customers were you
this question were only analysed for around 650 of the total sample who were typically physically close to each day (i.e. within a distance of 2 metres)?”
in employment now or at some point in the last 12 months (i.e. excluding • Based on the survey results, we calculate an overall score for each sector that
retired people, full-time students not working, the long-term sick and disabled, accounts for both worker and customer proximity in the workplace i.e.
those caring full-time for family members and the long-term unemployed). ‘workplace sparsity’. These scores feed through to our PwC ‘Return to the
• A second question on how many of those still working could work from home, Workplace’ Index as a ‘Risk factor’, holding a 25% weighting.
and if so what was the impact on their productivity, was only reported for • In an earlier UK Economic Update, we published results of a survey in late
around 600 people who remained employed at the time of the survey (i.e, March on the proportion of UK workers who felt they could work from home.
excluding those becoming unemployed or inactive since the lockdown began). Overall, this was true for around half of workers, but this was just 32% for
those earnings less than £20,000 per year and around 70% for those earning
• Respondents were asked to fill in basic demographic information, what sectors
over £50,000 per year. This reflected both the nature of these jobs and the fact
they worked in and their income levels. The sample was selected to include
that lower paid workers were more prevalent in lockdown sectors such as non-
individuals from across the UK on a statistically representative basis.
essential retail, hospitality and leisure. The April survey included updates on
Participants were taken from a panel that PwC Research uses for regular
these results as well as indications of productivity impacts from home working.
weekly omnibus surveys on a wide range of topics as an input to market
UK Economic Update 13 May 2020
PwC 40Return to Work Index methodology
Below we set out further details of the methodology for our Return to Work Index. We consider the key variables to assess
economic and risk factors for all industry sectors, which are the normalised, weighted and aggregated into an index score.
Economic Factor(s) Weight Factor Rationale
GVA: Economic impact of returning to work • The opening up of businesses and the return of employees to work increases business
(Sector share of total GVA* Sector productivity*GVA impact of activity in that sector.
removing current restrictions). 50% Positive • Higher productivity sectors produce higher economic benefit for the same level of risk.
Source: ONS, PwC analysis • The higher the economic impact of relaxing the restrictions of a sector, the higher the
index score.
Risk Factor(s)
Independence from public transport: Share of • Some workers are reliant on public transport to get to work.
workforce travelling to work through methods other • The higher the share of workers not using public transport the lower the risk of
than public transport 25% Positive transmitting COVID-19 and the higher the index score for the sector.
We calculate a notional index value for each sector based on a
regional weighted average of the percentage of people who do
not use public transport as their ‘usual method of travel to work
(bus, coach, railway train, underground etc.)
Source: ONS, PwC analysis
Workplace sparsity • Sectors with higher work sparsity will have lower levels of face to face interaction with
workers and customers, lowering the chance of COVID-19 transmission.
We calculate a notional index value for each sector based on a
data from our latest PwC Research Survey on the typical level of
25% Positive • The higher the workplace sparsity for a sector, the higher the risk index score.
face to face interaction with workers and customers pre-COVID-
19
Source: PwC Research Survey, PwC analysis
UK Economic Update 13 May 2020
PwC 41You can also read
