Widespread working from home among people who would previously have been based in offices in towns and cities across the country is being highlighted as potentially a major drag on overall activity within the UK economy.
In fact, a study conducted by the Centre for Economics and Business Research (CEBR) has concluded that if people who worked in offices prior to the Covid-19 pandemic don’t return to those spaces soon then the costs to the economy could be as high as £480 billion.
The consultancy firm CEBR is owned by Douglas McWilliams, who previously worked as the chief economic advisor to the Confederation of British Industry (CBI), a prominent business lobby group which itself has expressed serious concerns about the potential impact of widespread working from home.
The UK economy took a huge hit as the virus pandemic struck earlier this year and it’s not clear how long it might take for overall GDP to reach the levels recorded in late 2019 and early 2020.
According to the CEBR, that will depend partly on the extent to which working from home becomes normalised, with a lack of commuting and office occupancy expected to drag significantly on the economy and prevent GDP from reaching pre-Covid levels until as late as 2025.
“If we carry on working at home when at least half want to return, we run the risk of turning into a 90 per cent economy stuck a 10th down off its peak,” Mr McWilliams from CEBR is quoted as saying by the Guardian.
Businesses set to be most badly impacted by a lack of office space occupancy and routine commuting are likely to include sandwich shops, convenience stores and other retailers who rely on footfall to support their sales.
Retailers have been cutting jobs extensively in recent months with the virus crisis having made much worse economic conditions that were already very testing.
The corporate insolvency experts of Begbies Traynor said recently that the second half of 2020 will see a sharp rise in the number of business entering administration and liquidation, with hundreds of thousands of enterprises across the country reportedly showing signs of significant financial distress.
