Lowest number of births in the UK since records began predicted

Uncertainty around job market pushing people to postpone pregnancies, says PwC

Kate Ng
Thursday 07 January 2021 00:30 GMT
Birth rate expected to decline in UK as people postpone pregnancies amid job uncertainty
Birth rate expected to decline in UK as people postpone pregnancies amid job uncertainty (Getty/Stockphoto)

As Britons worry about the future of their jobs and postpone plans to start a family as a result, the UK could see the annual birth rate dipping to its lowest level since records began. 

London could also see its first population decline in the 21st century as a shift away from city living is likely to increase the number of people moving out of the capital, and decrease the number of people moving in.

The coronavirus pandemic has plunged the UK’s economy into an unprecedented recession, which could negatively affect planning for a family, according to Pricewaterhouse Cooper’s (PwC) annual economic predictions report.

A PwC survey in December found that 19 per cent of respondents expect to lose their jobs in the next year. In April, a survey by the Office for National Statistics revealed that 42 per cent of people thought their household finances would get worse in the next 12 months.

People postponing pregnancies as a result of the uncertainty surrounding the job market is expected to translate into fewer births in 2021.

Hannah Audino, an economist at PwC, said: “A structural decline to the birth rate will depend on the level of scarring in the labour market and the pace of recovery.

“A longer recovery will reduce people’s 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.”

The pandemic has also forced city-dwellers to rethink their living situations. In August, the London Assembly Housing Committee found that out of a third of Londoners wanting to move to a new home, nearly half (46 per cent) wanted the home to be outside of the capital.

Private garden or balcony spaces and a home close to a park or green space became the top priorities for Londoners rethinking their living situations as a result of the coronavirus outbreak.

According to PwC, this shift in priorities combined with a smaller number of graduates arriving in the capital due to the rise of remote working, as well as reduced immigration, could drive London’s population down this year.

The accounting firm also predicts that the UK’s unemployment rate will record its largest ever quarterly increase in the second quarter of this year, with women remaining disproportionately affected by the impact of the pandemic.

There is reason to be worried that the gender pay gap in the UK will also suffer as a result of coronavirus – although the gap has been gradually declining, from 26 per cent in 2000 to 16 per cent in 2019, there is evidence to suggest this trend could be reversed this year.

A PwC survey reveals that 28 per cent of women say their pay has decreased because of the pandemic, compared to 22 per cent of men. The company expects these disparities to worsen once the government’s furlough scheme comes to an end, “as women make up a bigger share of employees in shut-down sectors”.

Under PwC’s “slow recovery” and “quick recovery” economic scenarios, the UK’s annual GDP growth rate ranges from around 2.2 per cent to 4.8 per cent in 2021. Most of the output loss caused by the first national lockdown in March 2020 would be recovered by the end of 2021 under the “quick recovery” scenario and by the middle of 2023 under the “slow recovery” scenario.

Globally, the economy is projected to grow at a record speed this year, expanding by around 5 per cent in market exchange rates, the fastest rate recorded in the 21st century. This will depend on the “successful and speedy” rollout of the Covid-19 vaccines and continued accommodative fiscal, monetary and financial conditions of the world’s largest economies.

If these meet expectations, the global economy could be back to pre-crisis levels of output by the end of 2021 or early 2022, but PwC warns that the “great rebound” will be uneven across different countries, sectors and income levels.

Barret Kupelian, senior economist at PwC, said: “For example, the Chinese economy is already bigger than its pre-pandemic size, but other advanced economies – particularly heavily service-based economies like the UK, France and Spain or those focused on exporting capital goods, such as Germany and Japan – are unlikely to recover to their pre-crisis levels by the end of 2021.”

Join our commenting forum

Join thought-provoking conversations, follow other Independent readers and see their replies


Thank you for registering

Please refresh the page or navigate to another page on the site to be automatically logged inPlease refresh your browser to be logged in