The outbreak of Covid-19 posed a question of the global lockdown, restricting society from living its everyday lives. Naturally, no one in England and Wales was allowed to go outside unless it was the reason to go to the hospital or purchase groceries. Furthermore, people could not work at their workplaces anymore, but only from home. Many companies went bankrupt due to this issue, and numerous people were fired and left in a horrible financial situation. By and whole, the lockdown had a severe impact on the people of the UK, leaving the public struggling to earn funds.
To begin with, as people were fired from their jobs, they had to seek other opportunities to earn money, which was highly challenging due to the unfavorable economic situation for businesses. The economic crisis that was faced by the business negatively impacted both employers and employees in a financial way. According to Office for National Statistics (2021), 1.771 million people have lost their jobs since 2019, the beginning of the lockdown.
In other words, the percentage of people who lost their jobs is now at 4.8%, meaning that “about one in 20 people who want a job can’t find one” (King, 2020, para. 5). At the end of last year, the unemployment rate stood at 5.5%, so it is evident that people are having fewer difficulties seeking income sources his year than the previous one (King, 2020).
Fortunately, the percentage is expected to drop as the economy is gradually recovering, providing the residents of England and Wales with more job opportunities (Government UK, 2021). That is why most people were struggling to survive the lockdown since it impacted not only their mental health but their financial circumstances.
As a result, the aforementioned crisis led to the occurring instabilities in the labor market, which undoubtedly negatively impacted the economic system of the UK. Be more particular, 390 thousand registered businesses and 520 thousand of unregistered organizations stopped their operations or did not survive the financial crisis and went bankrupt (Lambert & Van Reenen, 2021). In contrast, the companies trying to survive the unstable economic situation in the UK decided to increase their prices (Lambert & Van Reenen, 2021). Consequently, many people could not afford to purchase the necessities because of their financial circumstances.
Moreover, since people were not allowed to leave their places and, hence, stayed at home for a much longer time, the amount of money that should have been paid for the communal services increased sustainably. Fortunately, the government of the UK helped low-income families by pausing debt payments and making sure that housing services were provided to the residents during their self-isolation (Ingrams, 2020). Overall, people’s situations were relatively comfortable until the restrictions were lifted and they were required to pay for their bills at once.
To sum up, the economic crisis during the Covid-19 pandemic was influential as many people in the UK lost their jobs and could not provide for themselves and their families. In addition, it was a real challenge to find a new source of income, considering that most businesses struggled to sustain their position on the market and not go bankrupt. It seems significant to mention that the communal services and the prices for necessary products were soaring on a daily basis so that fewer people could afford to cover their bills due to their unfavorable financial circumstances.
Reference List
Government UK (2021). Jobs and benefits: the COVID-19 challenge. [online] GOV.UK. Web.
Ingrams, S. (2020). Help with energy bills announced by the UK government. Web.
King, B. (2020). Seven charts on the coronavirus jobs market. BBC News. Web.
Lambert, P. and Van Reenen, J. (2021). A wave of COVID-related bankruptcies is coming to the UK. What can we do about it?[online] LSE Business Review. Web.
Office for National Statistics (2019). LFS: Unemployed: UK: All: Aged 16+: 000s: SA: Annual = 4 quarter average – Office for National Statistics. Ons.gov.uk. Web.