ben thompson reflects on how the uk economy, businesses and jobs have changed amidst the coronavirus pandemic and in the wake of brexit. 2021 has for many people been a long and difficult year. a year of change and uncertainty... ..and worry about lives and livelihoods and jobs and prospects. early hopes of a return to something more normal have been replaced by a realisation that covid will be around for much longer than we first thought. its impact on how we live and how we work has been far more significant than feared and our social lives and shopping habits and travel plans, all still changed by this pandemic. and now, we are learning to live with this virus, but learning to live with its consequences will be harder — the lostjobs and the rising prices, and a big covid bill still to pay. getting back to where we were will take time and the big question is, just how long will it take? since the pandemic began last year, the whole united kingdom... the start of 2021 was not a happy new year. but we now have a new variant of the virus. we must therefore go into a national lockdown which is tough enough to contain this variant. that means the government is once again instructing you to stay at home. a rise in cases plunged the country back into a national lockdown. shops, bars and restaurants were forced to close once again. any festive cheer turned into a painful hangover. schools shut their doors. travel ground to a halt. office workers settled down in spare rooms and on kitchen tables, to work from home once again. and for those who couldn't, an extended furlough scheme helped prop up earnings. the scheme supported the wages of more than 11.7 million people after it launched in march in 2020. but it came at a heavy price, and by the time the scheme was wound down in the summer it had cost more than £70 billion. down in the summer, it had cost more than £70 billion. but even then, many firms feared it was being withdrawn too soon. many still weren't able to operate at full capacity and warned that without financial help, they could be forced to close. how confident are you that you will be here this time next year? 0oh, difficult question. difficult question. i want to still be here and i will do my damnedest to still be here. the true cost of the pandemic is still hard to calculate. as well as thejob retention scheme, there were loans and grants for businesses, to help them through the worst of the crisis. the total cost hit nearly £380 billion. but that support kept the economy moving. businesses were closed and workers stuck at home, but the economy avoided another huge slump. second time around, businesses and workers had learned to better navigate the restrictions. unemployment began to fall, cushioned by the furlough scheme, but remained stubbornly high with many still unable to get back to full—time work. prices began to rise as well, prompted by supply shortages and rising demand, as the economy began to reopen later in the year. inflation hit a ten—year high, prompting a rise in interest rates and speculation that more could follow. gdp had fallen very sharply, lockdowns naturally did that, but we quickly saw a rebound by the second quarter as things started to reopen. that second lockdown, businesses were able to reopen more, able to operate factories, businesses were able to get back up and running, and we did see that in the economic growth figures? exactly. the restrictions were limited to contact services, a lot of businesses were allowed to carry on. schools were not as disrupted as they were the first time around, so various areas of the economy were allowed to continue. at the start of the year we had unemployment at around 5.3%, about 1.8 million people, and then out on top of that, we also had another fifth of the population on some form of government support, be it the furlough scheme or self—employed help, and of course, a lot of people fell through the gaps. but it highlights the extent of the support that was required to just bridge the gap through the lockdown period. of course, since then, unemployment has come down very sharply, but all of the indicators currently suggest that the labour market is looking very strong, there's plenty of demand for workers and if anything, there's not enough workers available, who are able to fill the jobs that are out there. what happens in 2022? what will be year look like economically? so, we should complete the recovery in gdp terms in 2022, but there's still further catch—up because the economy would have naturally grown anyway had it not been for the downturn. the big challenge will be higher inflation, the energy inflation that we have seen in wholesale markets has not fully fed into household markets yet, and the increase in the energy price cap in 0ctoberwasjust10%, 11% increase, but we potentially have another 17% increase coming through in april and that will be a major shock for households when it happens. while every part of the economy continued to feel the impact of the pandemic, the hospitality industry was one of the hardest hit, and even now, it's dealing with a reintroduction of restrictions that many firms hoped were long gone. pubs, bars, restaurants and hotels all bore the brunt of lockdown rules. the brunt of lockdown rules — despite spending millions on new safety measures to protect their customers and staff. it's just so nice to be with people again. in april, hospitality venues were able to reopen after a winter of lockdown. but they could only do so outdoors, and even then, there were limits on numbers, and it meantjust a third of hospitality venues could trade, those that had outdoor space or a beer garden. it's nice to get together and to share what we've been doing. it feels like forever, that we've been able to sit down together. they're managing it quite well. you need to be out with your friends and family and do these things. - it was really challenging because you simply don't know, we did have pre—bookings and people were booking in because of the social distancing space limitations, but it still meant you had a mismatch between supply and demand where you had an unpredictable number of people coming, very heavily weather dependent in the early part, april and may, where people would cancel their bookings very last minute because they couldn't sit outside. and crucially, it meant it was difficult to get staff to come back to work and recruit new staff into the industry because we couldn't offer them a stable career choice and we couldn't offer them a guaranteed set of hours for them to return to hospitality. others had to wait until may to reopen indoors, and even then, it wasn't business as usual, with nervous customers staying away and many others deterred by the rule of six limits. it's nice to be back as a team and nice to see our regulars once again. we are down, financially, we are down, but we're surviving and we hope to survive. three, two, one.... byjuly, nearly all remaining restrictions were lifted in england. but they came with a warning from the prime minister that life would not instantly revert to normal. but that initial excitement gave way to a realisation that the pandemic was far from over. tighter restrictions remained in wales, scotland and northern ireland, and in december, england reintroduced some rules, moving to its so—called plan b, and as 0micron cases began to rise, so, too, did cancellations. many hospitality firms reported a slump in christmas bookings as fears of a new wave of infection convinced customers to stay at home. michael represents the night—time industries, bars, music venues and nightclubs, and he told me firms had learned to adapt, but many struggled to stay open. as you can understand, there were so many confusing guidelines and rules — even things where the local authorities and police were really struggling to interpret. so, for an industry that had been somewhat beleaguered, it was a very difficult time, especially economically, they were struggling. but in terms of the culture side of things and venues and nightclubs, once they were given the opportunity, they were out of the blocks because some of those youngsters were starved of those social environments and they could go out and enjoy. there were 850,000 new 18—year—olds who came of age during that period, who were without a doubt dying to get out to grace the dance floors with whatever moves they felt were right! is it fair to say the pandemic revealed some of the failings of the industry and businesses have taken those things, like not paying staff enough? without a doubt. we can see some of the failings and shortcomings on our side and we have work to do in terms of safeguarding and looking after staff. rates, environment, all of these key elements are going to make a difference, but we also need to invest in them. what will 2022 look like? i want to believe that 2022 is going to be our opportunity to take a handle on this and move forward. we need the confidence back and the uncertainty to be taken away. we need some strong economic drivers to allow us to rebuild and we need tourism back, without a doubt, and that has got to be a huge consideration, even with new variants coming forward. and like hospitality, the travel industry struggled to get off the ground this year, too. travel did resume, but with strict, fast—changing rules. february saw the introduction of hotel quarantine. uk residents returning from coronavirus hotspots abroad had to book a ten—night stay in an approved airport hotel. other foreign visitors were still off—limits. by the summer, foreign holidays were possible, at last, but with expensive tests to take and long forms to fill in, for many, a trip to the sun was still out of reach. how are you feeling about this holiday? feeling super, really excited. we're going away again after all this lockdown. normally going on holiday, it's something to look forward to, but i have to say, this has been a pretty stressful anxious time for everybody, so not sure i would do it again, knowing what i know from this experience. the impact of the frequently changing rules prompted anger from the industry. what we don't understand is why the uk, which has been - so successful with vaccines, - is expecting its vaccinated citizens travelling to portugal, - coming back, to quarantine. they've already been vaccinated. i so, they're making it up as they goi along and it is more mismanagement of the covid recovery- from the johnson government and sadly, it's unnecessary- disruption and stress for thousands, hundreds of thousands, of british families. - as the year went on and despite the challenges, confidence began to return. bookings jumped as airlines and passengers learned to navigate the restrictions. for many, it was their first holiday since the pandemic began. and for the travel industry, their first steps on the long road to recovery. laura is from the travel firm sky scanner. we've seen a huge changing the way the industry has approached we've seen a huge change in the way the industry has approached the pandemic and we've seen resilience from both travellers and the industry in the way we've had to adapt. flexibility was something that was relatively unheard of before the pandemic and something we have become accustomed to. like tickets and bookings and refunds? yes, flexible policies. probably a greater understanding of insurance and being able to change your plans is something that whilst not always what people have in mind, has enabled people to feel more confident if they are thinking about going away. the industry did learn to adapt and navigate the new rules, but the arrival of 0micron, the new variant, has brought new uncertainty about how and where we can travel. we believe that this will be a significant setback for demand this winter, real impacts on christmas, people will now cancel or postpone travel plans, and for a sector that hasn't had any revenue for 18 months, give or take a few months in the summer, it's really significant. airlines don't make money in the winter, so we've got a difficult stretch ahead of us now. 0n the high street, there was a quicker return to something more normal. shops reopened and shoppers, in need of a retailfix, rushed back. what have you got? a pair of trousers. i've bought my little boy three outfits, from the sales. do not show my partner this. i've had my firstjab, but i've got my mask for going into places. but covid has changed our habits. the shift to online gathered pace in the pandemic, and it means retailers are having to work much harder to keep us coming back to the high street. i'm so relieved that we've got here. we've been closed for around eight months out of the last 13 and how can you really run a business like that? luckily, we've got an online presence, so that has been really helpful. i don't know what would have happened if we'd not been online. 2021 was also supposed to be the year that we returned to the office en masse, finally ditching the kitchen table and zoom calls. but concerns over the roll—out of the vaccine and the need for staff to self—isolate meant that many bosses adopted a new, hybrid model, some time working in the office and some time at home. we're never going to go back to working the way we used to work. people working from home 3—4 days will need 20% less space but we won't do that if everyone is working from home on mondays and fridays, so we'll have to manage that quite carefully. and the implications for our town and city centres were clear. we rely really heavily on the office trade. there is locations that have 5,000 people and only 140 people came to the building, so most people were working from home or maybe just once a week coming. and that makes it really difficult. experts predicted the pandemic would change our lives in many ways, but it's brought some unexpected problems, too, not least, a lack of workers. and the uk's formal exit from the eu at the start of 2021 added to the complications. many workers who left due to brexit or covid didn't return. the impact was felt across industries, with a shortage of lorry drivers, abattoir butchers, fruit pickers and restaurant staff. in hospitality and retail, the hgv driver shortage caused particular problems for suppliers, especially for items shipped in from overseas. —— for supplies. it led to empty shelves and apologies to customers. a shortage of drivers means that you might find your bins are collected a little less frequently than they were in the past, and this is part of a wider problem across the industry, of a shortage of drivers, whether that's for bins or for restaurants and supermarkets. it's the perfect storm we have been talking about, so less testing through the pandemic, the exodus of eu skills as a result of brexit. we've had ir35, which is about tax treatment for the industry and finally we've had this ageing workforce of drivers in the uk which we have known about for some time, but in the uk every week, 2,000 drivers leave the industry and only 1,000 driversjoin, so we've got a real mismatch. we will talk much more about one of my favourite issues, which is bin collections, because we've talked about this before, but it is something which is so important and one of those industries we absolutely do take for granted. there were also shortages on the forecourt. petrol supplies ran dry, not because of a lack of fuel but a lack of drivers to deliver it. it meant scenes like this were repeated across the country. shocked, how am i going to get to work? my missus is nine months pregnant, and i could actually get stuck somewhere and not be able to get back. i'm empty now, running on fumes. what are you going to do? hopefully get home! and those shortages were just the first taste of the new challenges, as the economy reopens. rising demand, worker shortages, supply issues and soaring energy prices have pushed up prices in supermarkets, forecourts and in factories. shipping costs also hit record highs as the world reopened to global trade. inflation in the uk hit a ten—year high. as prices rise, wages aren't keeping pace. it means a squeeze on already stretched incomes. when we talk about a standard of living or income squeeze, we mean prices are going up faster than wages, and that is what we are having right now and that can feel quite unpleasant, and it will be one of the biggest issues for next year. how does the chancellor respond? he's in a difficult spot because his instincts are to get the public debt down over time, and if you look at the amount of total debt in the uk, it's at £2.2 trillion. to give you an idea how much that is, if you went back to when the pyramids were being built 5000 years ago, and started spending £1 million a day, you would be about two thirds of the way through it by now. it's a huge number. it doesn't really matter because usually you measure debt compared to income, the national income. 0ur total national debt is equal to the total national income roughly, and that's the highest it has been for a long time. his instincts are to try and get that down. you can do that in two ways, raise taxes, which he has done, and cut spending, which he has had a hard time doing it during a pandemic, so what does he do next? people think if you are going to tax the economy you are going to stop it growing as fast, and his other big problem apart from inflation is growth, because nothing is a bigger debt killer than growth. if you haven't got that, you've got a problem. and the most recent forecasts are that the economy is not forecast to grow very fast in the years to come. what has been fascinating about this year is that all of this has happened, and then in the background, we have we have brexit and that's barely got a look in, but it's had an impact. yeah, if you look back to the beginning of 2021, there was a lot of consternation that because of the new rules coming in and the fact we were not in the customs union and single market — it would mean tailbacks for trucks 50 miles long? it didn't happen. the worst case scenario, the armageddon of huge delays at the border didn't happen. but having said that, there are some companies who found it much more difficult to export, for example. it takes us to the point of here we go again. it's all looking horribly familiar, we're sat here december, 2021, it feels very reminiscent of christmas 2020. given what we're seeing, all bets are off for next year, aren't they? it feels like groundhog day, but we know more than we did this time last year, and we've all been through an intensive course of how to deal with a pandemic. the good news is, the economy is still growing, employees are back at work, largely. we didn't see the massive spike in unemployment we thought we might at the end of furlough. so, those are reasons to be positive. what's difficult for the economy and for businesses is, it feels a bit reluctant to invest. am i going to build anotherfactory and hire another 5,000 people? am i going to send them on training? —— five people. that's important, because the higher wage, high skills economy that the government wants, and that we all want, i think, relies on business doing a lot of the heavy lifting on that in terms of investment, and business investment is still very, very weak, and until we see that coming back, i think you have to be a bit cautious about how confident you are in what's going to happen to the economy. and watching the resourcefulness and the resilience of business has been humbling, actually. they've really pulled it out of the bag and i think in many ways, business, if you look at what happened, getting food supplies in, i think business had a pretty good crisis, i think people realised that business was important and that it could be a force for good. and really, used its ingenuity and resilience and resourcefulness to fix some problems that were really affecting society. many hoped that 2022 would be not just a new year, but a new start, that the worst of the pandemic would be over. but the arrival of a new variant has brought new challenges. it's forced business, and all of us, to think again and to do things differently, but quite what that looks like still isn't clear. hello there. it's been very mild today like yesterday. temperature reach 16 degrees. we stay in this mild air into the new year. will be accompanied by blustery winds, coming from a long way south, from the azores and madeira, bringing that mild air up from the uk. still some rain around as well. we have some rain around as well. we have some wet weather into this evening across northern england and northern ireland. that pushes up into central and southern scotland, and we will see rain sweeping eastwards across others�* parts of england and wales. that�*ll be helped along by some blustery winds which will keep it mild. temperatures not falling much, exceptin mild. temperatures not falling much, except in northern scotland, where we have clear skies and it�*s a bit chillier. that rain in east anglia on the southeast scoops away from any parts and it will turn drier and brighter. we still have the cloud across central and southern scotland. range and patchy into the afternoon. still going to be mild in the central belt. possibly 17 degrees in east anglia on the southeast of england. the previous, warmest new year�*s eve was in 2011, where temperatures reached 111.8 celsius. it stays very mild into the evening if you will be seeing in the new year. this is the weather we�*re expecting. patchy rain accompanied by a strong southerly wind, but that of course is going to be the mild air going. we�*ve got a band of rain to sneak its way eastwards which will be followed by brighter weather, some sunshine and some showers. heavy ones for western scotland and northern ireland. still very mild for new year�*s day, which is why the 14—16 . the weather starts to change a bit because that really mild air is getting pushed away from the uk and our wind direction is more of a west to south westerly wind. still mild but not as mild. we�*ve got wetter weather developing on sunday, mainly across southern and western parts of the uk. showers are longer spells of rain which could turn the light heavy as well. temperatures would be a few degrees lower on sunday, but it�*s still mild for this time of year. this is bbc news. i�*m lukwesa burak with the latest headlines for viewers in the uk and around the world. a record number of covid—19 cases are recorded in the uk and a further 332 deaths are reported. the uk health secretary sajid javid says the government will buy hundreds of millions more lateral flow tests after days of supply issues. a key witness speaks publicly after ghislaine maxwell was found guilty of grooming underage girls to be abused byjeffrey epstein. i just feel so grateful that the jury believed us and sent a strong message that perpetrators of sexual abuse and exploitation will be held accountable, no matter how much power and privilege they have. afghanistan�*s former president defends his decision to flee the countryjust before the taliban take—over, saying he did it

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