Among comparable economies, the UK ranked among the most severely affected by the COVID-19 pandemic. Just as for other countries, major disruption to global supply chains, and large-scale changes to working patterns – due to lockdown restrictions – were among the key factors contributing to the downturn.
The UK government undertook a wide range of large-scale interventions in the economy in an attempt to mitigate the very worst of the economic effects of the pandemic, with a view to facilitating a post-lockdown bounce-back. But even with major economic measures - such as furlough - in place, new findings from the COSMO study last month suggest that the economic reverberations were felt by many families across the UK. This is especially important in the context of the ongoing cost of living crisis, as there is a danger that the financial strain that families were exposed to during the pandemic will now spiral, further entrenching inequalities.
For many, the pandemic brought about changes to household finances. Across the families that we spoke to as part of the COSMO study, almost two in five (39%) felt that they were left financially worse off compared to before pandemic. Furthermore, there was a clear socio-economic dimension to this. We find that the worst off – including those from the most disadvantaged neighbourhoods, and/or living in social housing – are among the most likely to report that their finances had declined during this period.
