Lockdown easing could be delayed by at least two weeks, reports

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The final stage of the UK’s lockdown easing could be pushed back by at least two weeks from the planned date of June 21, according to reports.

The Times has reported that in a briefing to cabinet ministers, England’s chief medical officer Chris Whitty and chief scientific adviser Patrick Vallance had described the latest data as “very grim” and that the final stage of easing, which will remove all legal limits on social contact and allow close contact premises such as nightclubs to reopen, should be pushed back by a minimum of two weeks to allow all over-50s to be fully vaccinated and leave enough time for the jabs to take effect.

The delay also means the one-metre plus distancing rule in pubs and restaurants will continue to apply, as well as the ‘rule of six’ for groups meeting indoors.

An extension of the final stage of lockdown restrictions will likely draw howls of dismay from the UK’s nightclub operators, who have been forced to stay shut for over a year as the pandemic made the close contact prevalent in the spaces untenable.

However, the extension of lockdown, as well as heightened concerns about the highly infectious Delta variant from India, is also likely to spell trouble for firms in the travel sector, particularly those such as newsagent WH Smith PLC (LON:SMWH) which relies on airport passenger traffic for a large part of its business.

SSP Group plc (LON:SSPG), the owner of airport and train station eateries such as Upper Crust and Ritazza, could also find itself under pressure amid a prolonged downturn in passenger traffic as well as ongoing home working measures.

Also unlikely to be happy at the news are tour operators and airlines, who are already grabbling with the UK’s ongoing border restrictions which may be tightened further as the government seeks to prevent the importation of new cases of COIVD-19.

UK retail sales boom

Despite the end of lockdown seemingly receding slightly more into the distance, most of the UK’s service sector will be breathing a sigh of relief that the government has not deemed it necessary to reapply previous restrictions, particularly with new retail sales data showing a surge in shopping in May as high streets reopened across the country.

The latest figures from the British Retail Consortium showed total sales rose by 10% in May compared to the same figure in 2019, highlighting that a recovery in consumer spending was on track as restrictions eased.

The BRC’s data was reinforced by figures from Barclaycard, which reported household spending was 7.6% higher last month compared to the same month in 2019.

However, despite the upswing, analysts at Pantheon Macroeconomics warned that May could represent the high point for retail sales, noting that household disposable incomes “will come under pressure later this year from rising inflation, a reduction in the value of Universal Credit, and the closure of the furlough scheme”.

“We continue to doubt, therefore, that consumers’ spending will exceed pre-Covid levels on a sustained basis this year and thus cause the economy to overheat”, analysts said.

Shares in WH Smith were up 1.1% at 1,791.5p in early afternoon trading on Tuesday, while SSP was flat at 302.8p.

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