The monthly survey by the Bank of England of a wide range of chief financial officers from small to large businesses found that in the third quarter of the year sales would be 14% lower than they would otherwise have been because of Covid-19, employment 7% lower and investment 32% lower.

However, sales were expected to recover gradually over the next few quarters. The negative impact of Covid-19 on sales was expected to ease from 14% in 2020 Q3 to 12% in 2020 Q4, 10% in 2021 Q1 and 5% in 2021 Q2. 

The effects on employment were expected to be more persistent. Covid-19 was expected to lower employment by 7% in 2020 Q3 and reach a peak impact of 8% in 2020 Q4. After that, the effect on employment was expected to start to fall back to 5% by 2021 Q2.

The percentage of employees on furlough continued to fall in August. Businesses reported that 12% of employees had been furloughed in August down from 18% in July and a peak of 36% in April.  

Overall uncertainty remained high: 70% of firms viewed overall economic uncertainty as high or very high in August, slightly lower than 76% in the July survey and 74% in June.

Read more at the Bank of England’s Monthly Decision Maker Panel August 2020