The freezing weather that struck the United Kingdom has had the worst financial impact in 8 years.
The weather was a combination of the “Beast from the East” and Storm Emma bringing ice and snow.
Double the Snowfall Record
Two major storms making their way through the United Kingdom have cost the economy at least £1 billion per day. Snowfall recorded at Glasgow airport was double the previous record set in 1996, which had been 18 cm.
Motorways were jammed, restaurants were left without diners and people across the country were forced to dig their way out of the costly snowfall. Aside from the massive slice the storm took out of the economy each day, it may also slash the GDP growth in half for the first quarter of 2018.
Analysts predict that this will have been the most expensive weather event the country has experienced since 2010. The “beast from the east” arrived after having travelled through Siberia, while the southern portion of Great Britain was struck by Storm Emma. Back in 2010, the country (and its economy) ground to a halt a week ahead of Christmas after being struck with snow and freezing temperatures.
Construction Industry Harm
The construction industry may suffer the worst harm from the freezing weather. Experts predict a loss of up to £2 billion over the three peak storm days alone. Building workers had no choice but the stop working when the temperatures fell too far.
Other sectors to suffer from the extreme weather include retailers and transportation networks. There were dozens of crashes on the country’s motorways and several rail cancellations occurred in the same days. The public was asked to remain home if at all possible. The goal was to keep people from driving on the high street.
GDP Growth Impact
Economists have stated that the United Kingdom’s GDP growth may drop by as much as 0.2 percent during the first quarter. This cuts the previous growth rate of 0.4 percent in half.
“It is possible that the severe weather could lead to GDP growth being reduced by 0.1 percentage points in Q1 2018 and possibly 0.2 percentage points if the severe weather persists,” said EY ITEM Club chief economic adviser, Howard Archer.