Businesses await UK prime minister Boris Johnson's roadmap out of lockdown

Tom Belger
·Finance and policy reporter
·3-min read
Prime minister Boris Johnson (centre) walking with police officers during a visit to South Wales Police Headquarters in Bridgend. Picture date: Wednesday February 17, 2021.
Prime minister Boris Johnson is set to unveil a 'roadmap' out of the UK lockdown on Monday. Photo: PA

Businesses across England are awaiting prime minister Boris Johnson's "roadmap" out of lockdown, hoping for detailed plans on economic re-opening later on Monday.

The prime minister is due to set out how restrictions will be gradually eased in a speech in parliament, due at 3.30pm local time. Schools are set to reopen and outdoor socialising with one other individual will be allowed first from 8 March in the first of four stages of lifting curbs. Two households or six people are likely to be allowed to meet outdoors from 29 March.

Johnson said in advance of the speech his approach would be "cautious," and said each stage would only occur once four key tests had been met. The tests include the continued success of the vaccine rollout, evidence it is reducing hospitalisations and deaths, infection rates being low enough to prevent surging hospitalisations, and no change to government risk assessments from new "variants of concern."

Many companies will be anxious to hear when they can resume or expand trading and stop burning through cash. Large swathes of the economy, including retail, hospitality, travel, leisure, entertainment and sports, have been shuttered since early January, and hobbled by restrictions for much of 2020.

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The government has not yet confirmed what will be allowed in the second stage of easing or when it might take place, with multiple conflicting reports ahead of Johnson's speech. But several media outlets expect non-essential retail and outdoor hospitality to be re-opened during the second stage, either in mid- or late April.

"Our decisions will be made on the latest data at every step, and we will be cautious about this approach so that we do not undo the progress we have achieved so far and the sacrifices each and every one of you has made to keep yourself and others safe," said Johnson.

UK stocks were trading lower on Monday, with the FTSE (^FTSE) down 0.6%. Many stocks in sectors hardest-hit by lockdown restrictions were among the biggest fallers, suggesting the lifting of economic restrictions will be slower than expected by investors.

Retailer JD Sports (JD.L) lost 2.8% and Games Workshop (GAW.L) lost 1.9%, rail ticket website Trainline (TRN.LR) lost 2.1%, property listings site Rightmove (RMV.L) shed 3% and housebuilder Persimmon (PSN.L) shed 1.2% in early trading on Monday.

"There could be some disappointment around this particularly when it comes to non-essential retail, pubs, restaurants and hairdressers likely to find that they may not be able to open much before mid-April," said CMC Markets UK chief market analyst Michael Hewson.

The BBC reports the government expects five weeks between each stage of loosening the rules. A government source told the Guardian there was a "trade-off" between plans to ease social mixing rules first and keeping parts of the economy closed

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Hewson added: "This is likely to mean that Chancellor of the Exchequer Rishi Sunak will have to extend furlough measures until the middle of the summer, along with the business rates holiday, as well as the cuts to VAT of 5% in his Budget next week. To not do so would potentially be the final straw for a lot of businesses already on life support, and keen to reopen sooner rather than later."

Analysts at JP Morgan also said in a note the easing plans were "slow," but should still produce a "large GDP gain from the spring as confidence returns."