UK economy will bounce back. We’ve already seen a sign of pent-up demand – leader comment

After retailer Next starts taking online orders again after a three-week break, it is deluged with orders.

Chancellor Rishi Sunak aims to support business during the lockdown (Picture: Pippa Fowles/Crown Copyright/10 Downing Street/PA Wire)

One of the most alarming consequences of the lockdown is the predicted loss of more than two million jobs if it lasts for three months.

However, as Chancellor Rishi Sunak pointed out, it would be “self-defeating” from a strictly economic viewpoint not to tackle the virus. The financial cost of failing to do so would almost certainly be worse.

The UK’s plan is to “keep as much of the productive capacity of our economy as possible” – for example, by paying companies to furlough staff – so that the country stays in as fit a state as possible.

The Office for Budget Responsibility’s forecasts about the cost of a three-month lockdown were grim, but it is also expecting the UK’s GDP to “bounce back quickly”.

And there has already been a sign of that pent-up demand. Retailer Next stopped taking online orders for three weeks as it reorganised its warehouses to abide by social-distancing rules.

When it re-opened, demand was so high that it had to quickly shut down again. However, it re-opens today and other businesses should have confidence that their customers too will return in droves as soon as they are able.