Banking
After overcoming a brief shock at the start of the March 2020 lockdown, the UK banking sector enjoyed a steady 2020 which has been followed by a boom throughout 2021. This has been particularly apparent in M&A (mergers and acquisitions), in which investment bankers advising on deals have collected over £4 billion in fees in 2021. The successful vaccine rollout and steady economic growth combined with pent up demand from private equity firms with access to substantial cash piles has caused the banking sector to boom. Nonetheless, banks do remain vulnerable to the increased amount of debt that businesses have taken on during Covid-19 and their consequent risk of default. The number of firms with worrying levels of debt stands at 33 percent this year from 14 percent in 2019. Like many industries, Covid-19 has not affected banking evenly, but the sector only looks to gain provided the UK economic recovery continues apace. (Josh Cole)
Education
The Covid-19 pandemic hit the education system when the country went into lockdown. Schools were forced to close their doors and venture into the realm of online teaching. Since the colossal disruption to education, schools have reopened and implemented several measures to recover from the impact of the pandemic. The government has provided additional funding to schools, aiding teachers as they adapt the curriculum to support children who missed out on valuable learning during the pandemic. These efforts have included providing students with extra one-to-one sessions, as well as introducing after school classes. Covid-19 lateral flow testing is now being used in schools to identify and prevent the spread of the virus. Furthermore, wellbeing support has been expanded to support students experiencing anxiety regarding Covid-19. Whilst some elements of education such as the Summer GCSE and A-level exams still remain uncertain, schools are starting to return to a ‘new normal’. (Lauren Stanton)
Manufacturing
Hailed as heroes for providing PPE, ventilators and vaccines in the height of the pandemic, British manufacturers lost an estimated £18 billion, 10 percent of the industry’s total value. Fortunately, growth in this sector has partially rebounded, projected to return to pre-pandemic levels by the end of 2022.Brexit has exacerbated supply chain troubles from the pandemic, and business leaders have warned the government of growth stagnation if investment is neglected, adding that the recent budget proposal should have gone further to invest in skills and R&D for manufacturing. The UK should use the rebuild of the manufacturing industry as an opportunity to prepare for the fourth Industrial Revolution. Digitisation and a Net Zero transition will characterise the future of manufacturing, therefore embracing innovation and building back smarter will be crucial if the UK hopes to be a global leader in technology. (Tom Leverett)
Property
Over the past 18 months, the property sector has undergone one of the most significant booms in recent years. However, this has not been felt evenly. Residential property has performed exceptionally well, with wealthy buyers fuelling demand for out of city living. Furthermore, in November, the government’s stamp duty exemption on the first £500,000 of a property has helped the average UK house price to rise above £250,000 for the first time. The commercial property sector, which includes spaces such as offices and hotels, has suffered under more turbulent conditions. Multiple lockdowns saw tenants in the retail and hospitality sectors unable to keep up with rent payments which significantly decreased incomes for landlords. Additionally, a massive shift to work from home saw companies scale down and even close offices. Though the latter half of 2021 has seen a rebound, it’s clear that the property sector’s profits have not been shared equally. (Josh Cole)
Travel
The travel industry has arguably been one of the most negatively affected by Covid-19. This is largely due to the controversial implementation of travel bans halting movement to any countries in the early stages of the pandemic. Numbers of air passengers arriving in the UK fell by 98.3 percent between February and April 2020. The economic impact of this meant that between February and May, travel and tourism businesses turnover fell by 26 percent, with many relying on government schemes to survive. However, due to the relaxation of international travel restrictions becoming increasingly commonplace across the globe as a result of mass vaccination programs, experts believe that a travel boom is looming. Questions still remain as to whether the industry will be able to cope with the sudden increase in demand after a prolonged period of next to none. (Jack Langton)
Energy
As the global economy contracted, the energy industry naturally saw demand and investment abruptly decline. The International Energy Agency (IEA) estimates that global energy demand dropped by a total of 5 percent, with fossil fuels seeing the largest decrease. During the pandemic, however, the energy industry was posed with a bigger problem in the rapidly developing global climate crisis. The industry’s response to Covid-19 transcends mere matters of supply and demand and instead revolves around reform for environmental sustainability and the objective of net-zero emissions. Modernisation and investment in renewable energy are the top priorities in both recovering from the pandemic and planning for the future. Grid modernisation and digitalisation are progressions for the industry which were partially necessitated by the pandemic, and contribute further to the industry's top priority: promoting clean and renewable energy. New regulation and reform will aim to direct a majority of investment towards environmental initiatives within the next five years. (Kai Hain)
