For the past year, the British economy has yo-yoed with the government’s pandemic restrictions. On Monday, the next bounce began as shops, outdoor dining, gyms and hairdressers reopened across England for the first time in months.
In London, friends gathered at tables outside a pub at one minute after midnight to toast the reopening. Others queued in light flurries at 7 in the morning for shops to open their doors. Barbers and beauty salons had long queues, and by lunchtime the outside tables at restaurants had filled up.
But the pandemic has left Britain with deep economic wounds that have shattered historical records: the worst recession in three centuries and record levels of government borrowing outside wartime.
The reopening has exposed the businesses that didn’t survive the multiple lockdowns and whose windows have been boarded up for good. Some of the shuttered businesses were once style-setters, such as the Topshop on Oxford Street, one of Europe’s busiest shopping streets. Many neighborhood restaurants are now darkened, empty shells.
Last March and April, as the coronavirus spread quickly through Britain, there was an economic slump unlike anything ever seen before as schools, workplaces and businesses shut abruptly. Then a summertime boom, as restrictions eased and the government helped usher people out of their homes with a popular meal-discount initiative called “Eat Out to Help Out.”
Beginning in the fall, a second wave of the pandemic stalled the recovery, though the economic impact wasn’t as severe as it had been last spring. Still, the government is spending about 344 billion pounds, or $471 billion, on its pandemic response. To pay for it, it has borrowed a record sum and is planning the first increase in corporate taxes since 1974 to help rebalance its budget.
By the end of the year, the size of Britain’s economy will be back where it was at the end of 2019, the Bank of England predicts. “The economy is poised like a coiled spring,” Andy Haldane, the central bank’s chief economist said in February. “As its energies are released, the recovery should be one to remember after a year to forget.”
Even though a lot of retail spending has shifted online, reopening shop doors will make a huge difference to many businesses. Foot traffic across Britain’s shopping locations on Monday was more than double what it was last week, according to data from Springboard.
Daunt Books, a small chain of independent bookstores, had been busy preparing to reopen for the past week. Throughout the lockdown, a skeleton crew “worked harder than they’ve ever worked before, just to keep a trickle” of revenue coming in from online and telephone orders, said Brett Wolstencroft, the bookseller’s manager.
“The worst moment for us was December,” Mr. Wolstencroft said, when shops were shut in large parts of the country beginning on Dec. 20. One day’s worth of revenue in the run-up to Christmas is similar to a week’s worth during the rest of the year. “Realizing you’re losing your last bit of Christmas is exceptionally tough.”
He’s been looking forward to having customers return to browse the shelves and talk to the staff. “We’d sort of turned ourselves into a warehouse” during the lockdown, he said, “but that doesn’t work for a good bookshop.”
On Monday afternoon, Daunt’s flagship store in central London was busy without being crowded. Children’s books had been particularly popular so far that day, Mr. Wolstencroft said. All its stores, even the one in the City of London surrounded by largely empty office buildings, were doing better than expected, he said. The booksellers were back to doing what they do best: making recommendations. One customer looking for a novel about London for a German friend was quickly ushered over to the corner where the books by British author Zadie Smith were.
With the likes of pubs, hairdressers, cinemas and hotels shut for months on end, Brits are expected to build up £180 billion in excess savings by June, according to estimates by the Office for Budget Responsibility. That money, once people can get out more, is expected to be the engine of the recovery — even though economists are debating how much of it will end up in the tills of businesses. Some forecast just 5 percent, saying that medium- and high-income households are more likely to keep hold of their savings.
Britain’s official unemployment rate has stayed relatively low because of the government’s wage support initiative, which has provided up to 80 percent of workers’ salaries when restrictions stopped them from working. At last count, about six million people, or a fifth of the work force, was on furlough.
Monday marked just one phase of the reopening. Pubs can serve customers only in outdoor seating areas, and less than half have such facilities. Hotels will also remain closed for at least another month, alongside indoor dining, museums and theaters. The next reopening phase is scheduled for May 17.
Over all, two-fifths of hospitality businesses have outside space, said Kate Nicholls, the chief executive of U.K. Hospitality, a trade group.
“Monday is a really positive start,” she said. “It helps us to get businesses gradually back open, get staff gradually back off furlough and build up toward the real reopening of hospitality that will be May 17.”