Unprecedented third slump in four years looms as shoppers stay at home and vital transport links grind to a halt
Snow blanketing much of the UK could push the economy into an unprecedented triple-dip recession, economists have warned.
With the icy blast of cold weather showing no immediate signs of letting up, and some places not expected to see green grass again until next month, the economic forecast is equally gloomy. A series of economic releases – including weak trade data, downbeat business surveys and dreary retail sales – have fuelled concerns that official figures out this week will show that output fell in the final quarter of last year.
Now analysts fear a cold snap in January could lead to another quarter of contraction, plunging the UK into its third recession in four years. As transport services ground to a halt, Britons were unable to get to shops and restaurants, companies shut down early, construction work was hit, and supply chains were disrupted. Howard Archer, chief European and UK economist at IHS Global Insight, said retailers would be particularly hard hit, as the weather disrupted Saturday’s shopping hours.
David Tinsley, UK economist at BNP Paribas, said: “The scary thing is that, as the snow falls in London and widespread disruption beckons, we could yet get a drop in first-quarter GDP as well. We would then be in triple-dip territory, albeit for erratic reasons.” With the Met Office forecasting snow in parts of the country well into next week, the economic hit could be serious. “Clearly, the longer that the snow and ice lasts, the greater will be the negative impact on the economy,” said Archer.
The snow, bitter cold and harsh easterly winds continued to cause widespread disruption to travel by air, road and rail on Saturday. Further problems are expected as a blanket of snow falls across the country on Sunday morning in London and the south-east and spreading north throughout the day. A search was under way on Saturday night for three people missing in Glen Coe, following an avalanche.
At Heathrow furious passengers vowed to boycott British Airways, the airport and, in some cases, Britain itself as the travel chaos showed little sign of abating on Saturday. One hundred flights were cancelled at Heathrow, 67 of them departures, with passengers given the option to rebook at a later date. On Sunday20% of flights from the airport have been cancelled.
Carla Agular, a sales rep from Toronto who was travelling to Ibiza on holiday, said: “I’m never flying BA again, in fact I’m never coming to this country ever again. I will not spend another penny in this country. In the future I’d rather pay an extra $500 to get a direct flight than have to set foot in this country. They knew days ago that it was going to snow, it’s appalling.” Agular had rebooked her flight by calling BA in Canada, because the airline’s website and UK telephone line had closed.
Economist Michael Dressley, from New York, had been forced to wait almost 30 hours for a flight to Zurich, missing a day’s vital preparation for this week’s World Economic Forum in Davos, Switzerland. He said: “I am never booking British Airways in winter via Heathrow again. It’s shambolic. The airline policy of telling passengers that they cannot tell how long the flight has been delayed is infuriating. Never again.”
Dressley was further frustrated when a second BA flight to Switzerland was cancelled on Saturday, forcing him to take a flight to Basel instead of his original destination, just so that he could escape from Heathrow.
Other passengers described luggage going missing for more than 24 hours or being stuck on grounded aircraft for five hours with the onboard crew similarly in the dark over why their flight was delayed.
Ken Knutzen from Seattle said: “In front of us there was a family with a 15- month-old baby and they wanted to get off the plane, but they were not allowed. No one knew what was going on, not even the captain.”
Elsewhere, there was anger that nearby hotels had apparently raised the price of rooms to cash in on stranded passengers. Knutzen and his wife Francis, travelling from Uganda to Canada, paid £289 plus £5 booking fee for Friday night at the Holiday Inn – last month they had paid £95 for a similar room.
The company’s website was advertising rooms from £47 and “sleep, park and fly” deals from £79, but would not return queries from the Observer. Francis said: “It’s so unfair to deliberately raise their prices to cash in on vulnerable passengers, it’s greed and it needs to be exposed.”
Retired entrepreneur Wendy Maitland, from Sark in the Channel Islands, was fuming at missing her flight to Nairobi after being told to wait in a queue that never moved. She said: “It’s a national disgrace.”
Some roads, both motorways, major routes and minor roads remained impassable on Saturday. Darron Burness, the AA’s head of special operations, said: “With the snow compacting down and turning icy, we’re likely to see treacherous driving conditions throughout the weekend. Any fresh snow on top will just add to the problems.” The RAC said it had dealt with nearly 9,000 breakdowns – 10% more than usual.
A young woman died when her car crashed near Grantham, Lincolnshire, on Friday evening and seven passengers were taken to hospitalon Saturday after a double-decker bus collided with two cars and ploughed into a garden in Coniston, near Hull. In Northern Ireland 900 homes were without power for a second day due to snow and high winds and 10,000 households in south Wales lost power.
Many rail companies operated emergency timetables, thus avoiding financial penalties for failing to meet punctuality targets, although the operators said the motive was to provide the best service possible in the conditions.
As homelessness charities geared up for heavier than normal demand on their services and shelters, people were being urged to let services know about rough sleepers they might see out in the cold, by reporting information via the streetlink.org.uk website or by calling 0300 500 0914.