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Two thirds of UK firms "fully operational" after COVID, survey says

Sun, 2nd Aug 2020 00:01

By David Milliken

LONDON, Aug 2 (Reuters) - Two thirds of British businesses
say they are now "fully operational" after the coronavirus
lockdown, up from half in June, according to a survey on Sunday.

A further 21% of the firms, polled in the first half of July
by the Confederation of British Industry (CBI), said they were
partly operational with some premises still closed.

"With businesses gradually reopening, this month's data
seems to indicate a turning point for the economy," said Alpesh
Paleja, an economist for CBI, one of Britain's main business
lobby groups.

But many firms, especially those in consumer-facing sectors,
remained in "acute financial distress", he added.

Britain's lockdown has been slowly lifting since May, with
the last major change on July 4 when hotels, pubs and
restaurants were allowed to reopen.

However, on Friday Prime Minister Boris Johnson said he was
postponing further relaxation, which would have helped some arts
and entertainment venues, due to rising cases.

Businesses on average said they were operating at 85% of
usual capacity due to social distancing, compared with 72% when
a stricter rule generally requiring two metres of distance was
in force.

Lack of demand from customers continued to be businesses'
most common challenge to resuming normal operations, the CBI
said. More than two thirds of firms named it as a barrier to
normal operations, down slightly from three quarters in June.

The Bank of England is due to set out new quarterly
forecasts on Thursday, as different sectors of the economy
recover at different rates from the unprecedented economic
damage.

Whether the main barrier to growth is lack of consumer
demand, or businesses' difficulties meeting it, will be key to
the central bank's decisions on stimulus later this year.
(Reporting by David Milliken;
Editing by Andrew Cawthorne)

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