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UK to experience 'baby bust' in 2021

Open-access content Wednesday 13th January 2021
UK to experience 'baby bust' in 2021

The UK's annual birth rate could dip to the lowest level on record this year as a result of the health, social and economic effects of COVID-19, according to PricewaterhouseCoopers (PwC).

The professional services firm said that the “unprecedented nature and size” of the economic shock caused by the pandemic could negatively impact family planning as many fear for their jobs.

A PwC survey last December found that 19% of respondents expected to lose their job in the next year, while a survey by the Office for National Statistics last April found that 42% of people thought their household finances would get worse in the coming 12 months.

Nine months later, and with uncertainties continuing, this is expected to translate into fewer births in 2021.

“A structural decline to the birth rate will depend on the level of scarring in the labour market and the pace of recovery,” said Hannah Audino, economist at PwC. “A longer recovery will reduce peoples’ expectations of their lifetime income, which could result in people deciding to have fewer children. 

“The effects of lower births won’t be felt for decades, but if the pandemic causes a permanent decline in births, the long-term challenges associated with the UK’s ageing population, such as greater pressure on public services and lower economic growth, could be brought forward.”

PwC's predictions for 2021 also include the largest quarterly increase in unemployment between April and June.

Under its ‘slow recovery’ and ‘quick recovery’ scenarios, Britain’s annual GDP growth rates range from around 2.2% to 4.8%, which would mean that most of the output loss caused by the first national lockdown would be recovered by the end of 2021 or by the middle of 2023.

Women are expected to be disproportionately affected by the impact of the pandemic, with the gender pay gap likely to increase in 2021, while London’s population could decline for the first time in the 21st century. 

Drivers of this would include city-dwellers rethinking their living situations in light of the pandemic, a smaller number of graduates arriving in the capital due to the rise of remote working, and reduced immigration.

“A more positive prediction is that one in every eight cars that will be newly registered in 2021 could be electric or hybrid,” PwC said.

“This will be driven by government investments, combined with an uptick in car sales as a result of the pent up demand that has accumulated over the year as consumers have delayed purchases.”


Image credit: iStock
Author: Chris Seekings

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