Big UK businesses predict a slow economic recovery

Nearly half of Britain’s biggest companies think it will take until the second half of 2021 before business recovers from the coronavirus pandemic, according to a survey on Monday that cast doubt on hopes for a speedier rebound.

Accountants Deloitte said 49% of chief financial officers from large and mostly listed companies forecast a return to pre-pandemic levels of business only in the latter half of next year.

Another 33% predicted a recovery in the first half of 2021 and 10% said business had already bounced back.

The survey chimed with other gauges of business sentiment, such as the Bank of England’s Decision Makers’ Panel, which show companies expect a lasting hit from the virus outbreak that has killed more than 45,000 people in the United Kingdom.

Deloitte said companies were resolutely downbeat about the outlook for jobs, investment and adding risk to their balance sheet, although less so than in its previous quarterly survey.

“Major corporates are expecting a long haul back to pre-COVID levels of revenue,” said Ian Stewart, Deloitte’s chief economist.

Separately, manufacturing trade body Make UK on Monday called for the government to extend its job furlough scheme, due to expire at the end of October, by six months for key industrial sectors.

Its latest survey showed 53% of manufacturers are planning to make redundancies, up from 42% previously.

“At present, the prospect of a V-shaped recovery for industry seems remote,” said Stephen Phipson, Make UK chief executive.

A Bank of England scenario published in May showed the economy regaining its pre-pandemic size by the second half of next year, but evidence for the kind of “V”-shaped recovery that would be needed is patchy.

The economy could shrink by more than 14% this year if there is lasting damage from the coronavirus.

BoE Governor Andrew Bailey said on Friday that Britain’s economy was starting to recover from its coronavirus lockdown but some job-intense sectors remained weak and the longer-term outlook was unclear.

The Deloitte survey of 109 chief financial officers from companies took place between June 26 and July 8.