Economists predict stalling growth due to Omicron

The Omicron coronavirus strain is likely to have a dampening effect on economic growth in the months ahead, research consultancy Pantheon Macroeconomics has predicted.

It’s predicted that consumer spending will be “very sluggish”, as falling confidence combines with falling disposable incomes.

Consumers are apparently already retreating into their homes, as searches for “pub”, “gym” and “restaurant” have all dipped since November 26.

Pantheon Macroeconomics economists made the dark prediction: “The early signs are that the Omicron variant is more transmissible than Delta, so we expect cases to rise sharply again in the run-up to Christmas as it becomes the dominant strain.”

Due to the impact of the strain the worst-case scenario is GDP growth plummeting by 6% in Q1 2022, leaving it 7% below pre-covid levels.

If there is a “lockdown lite” set of restrictions like those in European countries like the

Netherlands then the best situation is GDP dropping by 1.2% quarter-on-quarter in Q1 next year.

In such a situation restaurants, bars and shops would have to close by 6pm, while arts and recreation businesses would be forced to return to the 2 metre plus rule.

The new variant comes at a time when around 40% of households are fearful of contracting Covid, according to YouGov.

Output in the accommodation and foods services sector would fall back to a level 35% below its January 2020 level.

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