Britain is in for a tough ride

Alison Steed

Alison Steed

That figure, more than three times the fall of 5.9 per cent suffered in March 2020, is astonishing by any measure.

But when you consider the impact of the financial crisis back in 2008 saw GDP fall by just 1 per cent in September 2008 and how long the economy took to recover from that, it becomes clear just how steep the economic hill we have to climb to recover is going to be.

The prime minister has said the government needs “to work slowly to get the economy back on its feet” while simultaneously preventing a second spike in Covid-19.

Yet at the same time, he is asking the EU negotiators to “put a tiger in the tank” of Brexit to get an outline deal done by July. If this sounds familiar, it is little wonder – this was a slogan that has been used by Esso in adverts since 1959.

Quite why this came to the prime minister as a way to encourage extra vigour to be put into negotiations is anyone’s guess.

So, on the one hand the decision to press on regardless with the end of the Brexit transition period on December 31 could be seen as foolhardy because there is little expectation that much of that loss of GDP will be recouped by the end of the year.

Another shock to the UK economy in the form of a no-deal Brexit is likely to be a catastrophic blow.

The Confederation of British Industry, for example, has outlined that any financial buffers companies had in place to absorb the impact of a no-deal Brexit have been wiped out by the Covid-19 pandemic. So, companies would be left in a seriously precarious position by a no-deal Brexit at the end of the year.

Yet on the other hand, if you are in power and you end up with a no-deal Brexit, the move could be considered pure genius because as the Covid-19 crisis continues to play out, the line between the costs of that and a possible no-deal Brexit could become blurred.

But that is playing politics with people’s lives and livelihoods, which no matter what your political persuasion is frankly distasteful.

If such little progress has been made so far in the trade negotiations, it would suggest that encouraging faster moves towards agreement is posturing more than substance.

If Mr Johnson wants his legacy to be a stronger Britain, with good job prospects and a flourishing economy, he will need more than a tiger in the tank. As things stand, he will need a miracle.

Alison Steed is a freelance journalist