A cabinet minister today issued an unprecedented plea to people to return to central London to work and spend in shops, restaurants and cafés to save thousands of jobs.
The strongly worded intervention from the Communities Secretary came as the Bank of England warned that the recovery from the worst slump in almost a century would be slower than initially forecast, though the downturn will not be as deep as feared.
In a further grim forecast, the Bank also suggested more than a million jobs could be lost by Christmas.
The Evening Standard has launched a Saving Central London investigation because so many jobs and businesses are under threat with so few workers, tourists and day-trippers visiting the city.
Asked about the centre of the capital being “hollowed” out, Mr Jenrick told LBC Radio: “I’m very concerned about London and city centres more generally. Many of our city centres are very quiet and we need to get back into them, using the Chancellor’s Eat Out To Help Out scheme, going to visit shops safely, it can be done.
“Shops and the hospitality industry are going to great lengths to make sure they are following social-distancing guidelines and those of us who can do so need to get out and support them now or else we will see, I’m afraid, further job losses and a loss of some of those fantastic businesses that we see in our cities.”
In a direct appeal to millions of people whose jobs are not under threat, he added on BBC Breakfast: “Those of us who can, who do have secure jobs, should be safely going out to shop and to use cafés and restaurants and getting back to work to support the economy.”
The economy has been gradually revving up as lockdown has been eased. Many firms in central London as well as some Whitehall departments are bringing staff back into their offices, but at a cautious rate.
However, concerns are now rising that some of the relaxation of the Covid-19 restrictions may have to be reversed as the number of cases rises, with several towns in the north — including Preston today, as well as Aberdeen — already bringing in measures to combat local surges in infections.
The Bank of England said today that economic output will not return to levels seen before the start of the pandemic until the end of next year.
In its quarterly Monetary Policy Report, it said the recovery from the deepest slump in almost 100 years would be slower than initially forecast.
The Bank expects GDP to contract by 9.5 per cent in 2020, less than the 14 per cent it originally predicted, with a nine per cent bounce in 2021. This compares with a forecast of 15 per cent growth in the last report in May.
The bank said the recovery had been “earlier and more rapid” than it had forecast in its last report in May, with lockdowns lifted more quickly than anticipated and online spending stronger.
However, unemployment is expected to nearly double to about 7.5 per cent by the end of the year as employers react to the downturn and the end of the furlough scheme with mass redundancy programmes. The forecast suggests that more than one million jobs will be lost by Christmas.
The bank’s Monetary Policy Committee unanimously voted to leave the benchmark interest rate at the record low level of 0.1 per cent and said there would not be a rise until there was “clear evidence” of a strong recovery. Forecasters Capital Economics said they expected the cost of borrowing to remain at this level or even lower for “at least five years”.
The committee also said it was currently considering whether interest rates could go below zero to help stimulate the economy.
Laura Suter, personal finance analyst at investment platform AJ Bell, said: “The bank now forecasts that UK GDP will return to its 2019 levels by the end of next year, meaning it’s expecting two lost years of growth for the UK.
“It’s buoyed by the fact that people are getting out and spending more, no doubt fuelled by the summer holidays and lots of people staycationing, while Rishi Sunak’s stamp duty giveaway has also put the rocket boosters under the housing market, with the bank saying it has returned homebuying to near-normal levels.
“However, the bank paints a bleaker picture on the outlook for employment and business spending and cautions that the UK’s future is ‘unusually uncertain’ thanks to the continued spread of the coronavirus.”
The UK construction industry expanded for the second month in a row in July.
The IHS Markit/CIPS construction purchasing managers’ index hit 58.1 last month, compared with 55.3 in June. Any reading above 50 represents an expansion in business activity.
Tim Moore, economics director at IHS Markit which compiles the survey, said: “Construction companies took another stride along the path to recovery in July as a rebound in house building helped to deliver the strongest overall growth across the sector for nearly five years.”