The real-time economic effects of Covid-19 in the United Kingdom

This project will examine the microeconomic impacts of the Covid pandemic and lockdown on UK businesses and its interaction with the UK’s decision to leave the European Union. The project will deliver two key outputs, which are fundamental to designing and monitoring appropriate policies to mitigate the negative economic impacts of Covid. A first key output will be to provide real-time monthly summaries of the impacts of Covid on UK businesses and their expectations of business and employment outcomes for the coming months. This will use confidential information from firm-level surveys conducted by the Confederation of Business Industry (CBI), made available to us through a special agreement between CBI and the Centre for Economic Performance. The data are unique in providing rich, real-time, firm-level information on current trends and expectations. The surveyed firms have a broad coverage of sectors and regions and our previous work shows that they can deliver nationally representative economic analysis. Supplementing CBI survey data with firm and industry characteristics from ONS and company accounts, a second key output of the project will examine the channels through which businesses are being affected by Covid, such as demand, supply chains, and finance, and the interaction (if any) between these impacts and the effects of Brexit. The project will identify the heterogeneity of impacts by firm-size, sector, and region, and the evolution of business activity as the economy recovers and the UK leaves the EU. The granular findings will help design detailed policy responses.