High frequency data confirm plunge in activity

High frequency indicators for the UK suggest activity collapsed in mid-March and has shown no signs of recovery since. Our forecast assumes a double-digit decline in GDP in H1 2020 even if coronavirus restrictions are gradually eased from mid-May. Nothing in the high frequency data refutes this.

Commuting and electricity demand fell sharply after the lockdown. Even allowing for widespread working from home, this is indicative of a steep drop in activity. Forced closures caused retail and leisure activity to collapse, and even essential shops have seen much lower footfall since panic-buying subsided.

Weekly universal credit claims ran at 11x normal levels for a week either side of the introduction of the lockdown. While claims have since fallen back, the spike indicates the number of households suffering financial stress.

Topics: Coronavirus