Economy feels chill as UK grinds to a halt

Cost of travel and retail chaos running at £1bn a day / Government under pressure over lack of preparation

The economic impact of the freezing winter will deepen this week as Britain prepares for more travel gridlock, and millions of workers, travellers and shoppers were expected to stay at home in the run-up to Christmas rather than brave the icy conditions.

Heavy snow and sub-zero temperatures cost the aviation and retail industries many millions of pounds in lost revenue during one of the most crucial weekends of the year.

Heathrow, the world's busiest international airport, was closed to all but a handful of flights on Saturday and yesterday, forcing thousands to abandon their festive travel plans. Meanwhile, shopping centres in the South were also badly hit as consumers were forced to postpone buying Christmas presents on what had been billed as "Super Saturday". But with the Met Office predicting no let-up in freezing conditions and more snow likely in the South-east, the North and Scotland, economists fear that the knock-on effects will begin to hit the whole of the UK's economy at a key moment in its fragile recovery from recession.

Estimates from the insurer Royal Sun Alliance (RSA) have put the cost of the weather to the economy at £1bn per day, a sum that is thought to be hitting retailers, restaurants and bars the hardest. The total cost is expected to be around £13bn.

Howard Archer, the chief economist at IHS Global Insight, said many firms could now consider working between Christmas and the New Year to make up for lost business. But retailers, who had been hoping for a bonanza festive season as consumers sought to beat the January VAT rise, fear that many shoppers might now simply not bother.

"It now looks highly probable that some people may end up buying fewer Christmas presents and these sales are not subsequently made up," said Mr Archer. "If the bad weather persists most or all of the coming week, these problems will be magnified."

Even John Lewis, which has been leading the revival in the UK's high street's fortunes, saw sales slump by 10 per cent on Saturday, enduring nearly £5m in lost revenue when two of its 32 stores were closed by the weather on what should have been the biggest trading day of the year. Brent Cross shopping centre in north-west London was forced to close its doors.

Sarah Cordey, a spokeswoman for the British Retail Consortium, said that shops were deciding that they had to stay open later or open earlier. "The only comfort for retailers is that those areas which were affected by snow earlier in the month have to a large extent been able to make up for lost trade this Saturday and the latest snow seems to be in new areas."

Retail footfall across the UK on Saturday was down 24.3 per cent on last year, according to researchers Synovate. The worst affected areas were the West Midlands and South East, down 30 per cent.



With Heathrow predicting more cancellations today and desperate passengers having to spend another night on its terminals' floors, snow could not have come at a worse time for British Airways. Yesterday, the airline was criticised by passengers, some of whom had been forced to spend eight hours aboard planes waiting for take-off, only to be told their flight was grounded. Passengers described conditions within the flagship Terminal Five – used exclusively by BA – as "third world".

John Strickland, an aviation consultant, said cancellations and the cost of attending to stranded passengers came at a time of year when all airlines hoped to recoup – with the proceeds from sold-out festive-season flights – the losses incurred during other winter months.

"They could well run into a double-headed whammy of losing revenue and having to pay out for hotels, meals and in a few cases chartering aircraft," Mr Strickland said. "It could be touch and go whether they will make an annual profit now."

Kate Gibbs of the Road Haulage Association said recent weeks had been "absolutely horrendous" for the freight industry with some companies facing bankruptcy. "We need to get this grit situation sorted," she said.

"Where is the grit on those roads where the main distribution depots are and where the factories are? This is the third time we have been caught out recently. We should be prepared for cold winters."

There were warnings that self-employed people were likely to be particularly badly hit, and businesses were advised to prepare for the effects of workers staying at home. Dr Adam Marshall, director of policy at the British Chambers of Commerce, said: "Absenteeism is a concern for business at this time of year."

Philip Hammond, the Secretary of State for Transport, found himself under renewed attack for his handling of the crisis and the availability of grit. Mr Hammond ordered the Government's chief scientific officer to investigate whether harder winters might now merit further investment in resilience measures.

News
people
News
people
Arts and Entertainment
Keys to success: Andrew and Julian Lloyd Webber
arts + entsMrs Bach had too many kids to write the great man's music, says Julian Lloyd Webber
Voices
Left: An illustration of the original Jim Crowe, played by TD Rice Right: A Couple dressed as Ray and Janay Rice
voices

By performing as African Americans or Indians, white people get to play act a kind of 'imaginary liberation', writes Michael Mark Cohen

PROMOTED VIDEO
Have you tried new the Independent Digital Edition apps?
News
ebooksAn unforgettable anthology of contemporary reportage
News
i100
Arts and Entertainment
Hand out press photograph/film still from the movie Mad Max Fury Road (Downloaded from the Warner Bro's media site/Jasin Boland/© 2014 Warner Bros. Entertainment Inc.)
films'You have to try everything and it’s all a process of elimination, but ultimately you find your path'
Arts and Entertainment
Imelda Staunton as Dolores Umbridge in the Harry Potter films
books

New essay by JK Rowling went live on Pottermore site this morning

News
Russia Today’s new UK channel began broadcasting yesterday. Discussions so far have included why Britons see Russia as ‘the bad guy’
news

New UK station Russia Today gives a very bizarre view of Britain

News
people

Top Gear presenter is no stranger to foot-in-mouth controversy

Arts and Entertainment
Keira Knightley and Benedict Cumberbatch at the premiere of The Imitation Game at the BFI London Film Festival
filmsKeira Knightley tried to miss The Imitation Game premiere to watch Bake Off
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

Mobile Developer (.NET / C# / Jason / Jquery / SOA)

£40000 - £65000 per annum + bonus + benefits + OT: Ampersand Consulting LLP: M...

Humanities Teacher - Greater Manchester

£22800 - £33600 per annum: Randstad Education Manchester Secondary: The JobAt ...

Design Technology Teacher

£22800 - £33600 per annum: Randstad Education Manchester Secondary: Calling al...

Foundation Teacher

£100 - £125 per day: Randstad Education Chelmsford: EYFS Teachers - East Essex...

Day In a Page

The drugs revolution starts now as MPs agree its high time for change

The drugs revolution starts now as MPs agree its high time for change

Commons debate highlights growing cross-party consensus on softening UK drugs legislation, unchanged for 43 years
The camera is turned on tabloid editors in Richard Peppiatt's 'One Rogue Reporter'

Gotcha! The camera is turned on tabloid editors

Hugh Grant says Richard Peppiatt's 'One Rogue Reporter' documentary will highlight issues raised by Leveson
Fall of the Berlin Wall: It was thanks to Mikhail Gorbachev that this symbol of division fell

Fall of the Berlin Wall

It was thanks to Gorbachev that this symbol of division fell
Halloween 2014: What makes Ouija boards, demon dolls, and evil clowns so frightening?

What makes ouija boards and demon dolls scary?

Ouija boards, demon dolls, evil children and clowns are all classic tropes of horror, and this year’s Halloween releases feature them all. What makes them so frightening, decade after decade?
A safari in modern Britain: Rose Rouse reveals how her four-year tour of Harlesden taught her as much about the UK as it did about NW10

Rose Rouse's safari in modern Britain

Rouse decided to walk and talk with as many different people as possible in her neighbourhood of Harlesden and her experiences have been published in a new book
Welcome to my world of no smell and odd tastes: How a bike accident left one woman living with unwanted food mash-ups

'My world of no smell and odd tastes'

A head injury from a bicycle accident had the surprising effect of robbing Nell Frizzell of two of her senses

Matt Parker is proud of his square roots

The "stand-up mathematician" is using comedy nights to preach maths to big audiences
Paul Scholes column: Beating Manchester City is vital part of life at Manchester United. This is first major test for Luke Shaw, Angel Di Maria and Radamel Falcao – it’s not a game to lose

Paul Scholes column

Beating City is vital part of life at United. This is first major test for Shaw, Di Maria and Falcao – it’s not a game to lose
Frank Warren: Call me an old git, but I just can't see that there's a place for women’s boxing

Frank Warren column

Call me an old git, but I just can't see that there's a place for women’s boxing
Adrian Heath interview: Former Everton striker prepares his Orlando City side for the MLS - and having Kaka in the dressing room

Adrian Heath's American dream...

Former Everton striker prepares his Orlando City side for the MLS - and having Kaka in the dressing room
Simon Hart: Manchester City will rise again but they need to change their attitude

Manchester City will rise again but they need to change their attitude

Manuel Pellegrini’s side are too good to fail and derby allows them to start again, says Simon Hart
Isis in Syria: A general reveals the lack of communication with the US - and his country's awkward relationship with their allies-by-default

A Syrian general speaks

A senior officer of Bashar al-Assad’s regime talks to Robert Fisk about his army’s brutal struggle with Isis, in a dirty war whose challenges include widespread atrocities
‘A bit of a shock...’ Cambridge economist with Glasgow roots becomes Zambia’s acting President

‘A bit of a shock...’ Economist with Glasgow roots becomes Zambia’s acting President

Guy Scott's predecessor, Michael Sata, died in a London hospital this week after a lengthy illness
Fall of the Berlin Wall: History catches up with Erich Honecker - the East German leader who praised the Iron Curtain and claimed it prevented a Third World War

Fall of the Berlin Wall

History catches up with Erich Honecker - the East German leader who praised the Iron Curtain and claimed it prevented a Third World War
How to turn your mobile phone into easy money

Turn your mobile phone into easy money

There are 90 million unused mobiles in the UK, which would be worth £7bn if we cashed them in, says David Crookes