Britain’s small-business owners are betting on an economic recovery. Will a new variant get in the way?
For Britain’s small-business owners, the day is fast approaching when the country’s lockdown restrictions will end. And while some are confident about economic growth, others worry renewed or delayed lockdown restrictions will inhibit their path to recovery, according to a survey conducted by the British Chambers of Commerce.
More than half of small businesses in the U.K. said they were already operating at pre-pandemic capacity with concrete plans in place to grow their businesses over the next 12 months, according to the survey, which interviewed 1,000 small U.K. businesses.
The only thing that stands in their way is the threat of renewed lockdown restrictions, which are due to end on June 21. And with a rising number of cases—three-quarters of which could be traced to the more infectious Indian variant, according to Public Health England—that possibility is looming on the horizon.
Almost 40% of the companies surveyed said the threat of future lockdowns was a barrier to reopening their businesses. Other concerns included reduced demand from customers, difficulty recruiting staff, and inflation.
Meanwhile, many businesses believe that access to financing will help cover the remaining barriers to fully restarting. That was a point reiterated by Claire Walker, co–executive director of policy at the British Chambers of Commerce, who urged the government to clarify safety measures and “set out a clear package of support that would be available should further restrictions be imposed on businesses this year.”
This week marks the first anniversary of the U.K. government’s “bounce back loan” program, in which the government backed £46.5 billion ($65.8 billion) in loans to 1.5 million small businesses to help them out while lockdown measures were instituted. The government is now asking small businesses to begin paying up after the 12-month payment holiday, including through a “Pay as You Grow” initiative, which gives businesses the option to extend the length of their loan by up to 10 years and to pause repayments.
Meanwhile, the government is still mulling whether it intends to stick to the original timeline of dropping all COVID-19 restrictions on June 21. On Sunday, Health Secretary Matt Hancock said it was still “too early” to say whether the government will be able to adhere to this date for lifting the measures.
While June 1 was the first day the U.K. reported no COVID-related deaths nationwide since the pandemic began in March 2020, the worry of a delayed reopening is mounting. Berenberg analysts last week warned the spread of the new variant is giving investors cause for concern—questioning whether the U.K. is “on the cusp of another significant, ‘third’ wave that would require renewed restrictions to contain the spread of the virus.”
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