In Focus Risk
The 31 December deadline also caused
stockpiling at factories for the first time since October 2019.
Vaccine news boosts business optimism for 2021 While national output fell in November, news of the first effective coronavirus vaccine made UK companies more optimistic about the UK’s recovery in November. In fact, business optimism about the
coming 12 months was the highest recorded since the start of the pandemic. The number of UK businesses linking
news of an effective coronavirus vaccine to an expected rise in their output over the next year was more than five times higher than in October. This index was by far the highest recorded in the UK Recovery Tracker’s history. The improved outlook was greatest
among the sectors most affected by Covid- 19 lockdown measures. Almost two thirds (64%) of tourism and recreation firms and more than two fifths (43%) of real estate businesses predicted their output would rise in the next 12 months, up from 41% and 30% respectively in October. The software and services sector also
registered a large uptick in confidence month-on-month (69% anticipate growth vs 55% in October) and now has the most positive outlook for the next 12 months of all 14 sectors monitored by the Tracker, followed by healthcare (68% vs 63% in October). While the performance of UK services
businesses has been acutely affected by the tightening of restrictions and national
The rollout of the vaccine will take time, and the path of the UK’s recovery from Covid-19 will continue to be determined by a far- reaching set of factors, including the end of the Brexit transition period
January 2020
lockdown measures, there were also positive signs of resilience for the broader economy as a range of sectors reported stronger growth in November. It shows that not only were the mandatory restrictions less onerous than in the spring but that businesses have also adapted well during the pandemic.
Conclusion The news of an effective vaccine saw business expectations improve markedly last month, potentially helping to reverse the fortunes of consumer facing industries that have borne the brunt of Covid-19 restrictions. The start of vaccinations in
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December should help sustain and hopefully bolster this increase in confidence for the year ahead. It is encouraging to see news of a viable
vaccine boost business confidence for the next 12 months. We are nearing the end of a year that has forced firms to dig deeper than ever before, and lean on the resilience and innovation they have always shown in the face of adversity. But we are not out of the woods yet. The
rollout of the vaccine will take time, and the path of the UK’s recovery from Covid-19 will continue to be determined by a far- reaching set of factors, including the end of the Brexit transition period. CCR
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