Snow to cast icy spell over Britain’s economic growth
Economists predict that GDP could fall by up to 0.2% in the first quarter.
Extreme weather conditions are set to send a chill over Britain’s economy, with warnings of a significant impact to growth in 2018.
Economists predict that GDP could fall by up to 0.2% in the first quarter as heavy snowfall brings parts of Britain to a standstill.
“It is possible that the severe weather could lead to GDP growth being reduced by 0.1 percentage point in Q1 2018 and possibly 0.2 percentage points if the severe weather persists,” according to Howard Archer, chief economic adviser to the EY ITEM Club.
Mr Archer cited staff not being able to get to work, the negative impact on supply chains and reduced footfall at shops, leisure facilities, theatres, cinemas and restaurants as contributory factors to diminished growth.
However, he added that any fall is likely to be offset by a bounce back in the second quarter, meaning overall GDP growth in 2018 will be unscathed.
“There will obviously be a significant hit to UK economic activity from disruptions resulting from the severe weather conditions,” he added.
“We are wary of putting a hard figure on the total cost to the economy and it is also important to bear in mind that much of the lost activity will eventually be recouped.
“The increased ability of workers being able to work from home limits the hit to the economy, as does the ability to shop online. Also, any lost production could subsequently be recouped, particularly if firms are not working at full capacity.”
Retail experts have also warned that the beleaguered high street is braced for more pain amid warnings of a “disaster” as extreme weather across Britain keeps people away from shops.
Experts believe that heavy snowfall bringing parts of Britain to a standstill will hit bricks and mortar retailers hard as shoppers switch online instead.
Phil Dorrell, managing partner of retail remedy, said: “It will be bad for the high street. Anything that takes footfall away from shops reduces spend, and pushes spend towards the internet.
“In the short term, it’s very much a disaster. If you go down to the nearest road you will see that traffic is significantly less than it was previously, so most parts of retail will be hurting at this point.”