COVID variant halts UK reopening, UK businesses plea for help

Yahoo Finance UK, Senior City Correspondent Oscar Williams-Grut joins Yahoo Finance to discuss how the delta variant of COVID-19 has forced Prime Minister Boris Johnson to delay reopening plans, causing the business community of the UK to plea to the government for extended support until ‘Freedom Day.’

Video Transcript

MYLES UDLAND: All right, welcome back to "Yahoo Finance Live" on this Tuesday morning. Well, yesterday, in somewhat of a surprise, at least to US-based investors, we got the announcement the UK would delay its planned reopening by four weeks.

Yahoo Finance's Oscar Williams-Grut joins us now for the details on this. And Oscar, I ask, I thought there was a reopening that had already happened back in April or maybe in May. So what exactly are the new details of this latest announcement? And sort of how is it being taken over in London?

OSCAR WILLIAMS-GRUT: Well, Myles, after the back and forth in terms of restrictions easing and then being reimposed last year, Boris Johnson has been very cautious this time around to slowly and steadily ease off restrictions, with the hopes that he never has to go backwards along this path of reopening.

So as you say, we have seen some early reopening in April and May, things like outdoor dining and non-essential retail followed by indoor dining and bars and pubs reopening last month with some restrictions. And we were due to see all final restrictions, all legal restrictions lifting on the 21st of June, things like social distancing, mask mandates, and limits on numbers for sports, theaters, and the reopening of nightclubs.

However, last night, as you say, at a Downing Street press conference, Boris Johnson announced that this was being pushed back by up to four weeks. The new date for the so-called Freedom Day is the 19th of July. Now, this wasn't unexpected. Boris Johnson has consistently tried to paint an optimistic picture. But if you look at the underlying numbers for COVID cases, we seem to be in the early stages of what some people are calling a fourth wave due to the rapid spread of the delta variant.

The weekend press was full of reports that Johnson would be forced to make this delay announcement on Monday. And that indeed proved to be the case. He said last night that a delay of four weeks would allow the vaccine campaign to catch up and prevent the NHS being overwhelmed.

What we're seeing at the moment is the delta variant is spreading very rapidly. Cases are up 64% week on week. And in the worst affected areas, they are doubling. And even though the vaccine appears to be effective in tackling this variant, the sheer number of cases threatens to overwhelm emergency units and lead to avoidable loss of life.

That's why Boris Johnson is pushing back this Freedom Day, as I said. But it should delay some of the economic bounce-back. But it shouldn't alter the trajectory for the UK economy. We've got some signs of the incredible momentum we're seeing here at the moment today in jobs numbers. UK unemployment fell for the fourth month in a row in April. And a record 200,000 people joined the payroll.

Now, the worst-affected industries, such as bars and tourism, are hiring at the fastest rate as they begin to reopen. Still, some areas of the economy, such as nightclubs, are really struggling. The Nightclub Association warned yesterday that a quarter of its members could go bust in the next month without extra government support.

The British chamber of Commerce has also said that the delay to Freedom Day is a hammer blow for the economy. However, the government insists that the current support schemes are enough to see through businesses in this final stage of reopening. And they are resisting adding any more support at the moment.

MYLES UDLAND: All right, Yahoo Finance's Oscar Williams-Grut with the latest updates on the UK's path to recovery.