Omicron consequences UK businesses may face in 2022

The number of consequences of the Omicron variant transpired so far have certainly increased the apprehensiveness amidst a slew of small-to-large scale businesses, as well as institutional investors across the world as the new strain continues to quash the immunity obtained from the double-jabbed Covid-19 vaccination programme. The newly emerged mutation of Covid-19 (SARS-CoV-2) repealing the so-called maximum protection has severely deteriorated the marginal confidence.

Businesses across the world that were not able to resume their operations at the maximum possible scale were eventually looking forward to the next year, 2022, taking a fresh start with adequate staff size and minimal operative hurdles, the move that can accelerate them beyond the pre-Covid level of revenues.

The fresh unrest in the markets, including the cross border trade and disturbed international movement due to heightened border control measures, alongside the mini lockdowns and increased level of pandemic-induced restrictions have furthered the difficulties for enterprises operating in various industries.

Given the increased volatility and uncertainty with regard to the evolving nature of Omicron variant, higher transmissibility and ability to supersede the vaccine-acquired protection, the upcoming course of few quarters is likely to remain patchy for most of the industries, unless the healthcare authorities, along with the prospective vaccine makers and pharmaceutical corporations manage to formulate a meaningful response that can essentially bring down the rate of infections, as well as the vulnerability of people against the fresh strain.

Here are some of the potential consequences of the Omicron variant that can hurt businesses in 2022:

Reintroduction of lockdowns

Several countries are continuously examining the evolving course of Omicron variant, the daily rate of infections and the people seeking immediate medical intervention.

Following the sharp increases in the cases associated to the Omicron and previously existing Delta variant, the rate of hospital admissions has also seen a steep rise, effectively burdening the healthcare settings and limited resources to reprioritise the work of already deployed manpower to Covid care patients.

Earlier last month itself, the Austrian government reintroduced the fourth national lockdown after the country reported consequential increases in the cases linked to the Delta variant.

The recent lockdown announcement by the Netherlands government has escalated the jitters as investors and businesses are fearing a similar precautionary action to be taken by other European nations with a focus on the United Kingdom as it crossed 30,000 Omicron infections on Sunday, 19 December.

Nation-wide lockdowns materially restrict the commercial activity in the region, delaying the time of recovery as a large section of businesses still grapple with broken balance sheets and minimal earnings due to curtailed operations for most part of the pandemic era so far.

Reciprocatory restrictions

As a bunch of countries look forward to imposing country-wide shutdowns, some economies are contemplating the course of pandemic to reintroduce a set of pandemic-induced restrictions that can essentially help in bringing down the rate of infections.

Not only these curbs, the governments are gradually increasing the border control measures. Following the continuous rise in the cases, the administrations will be left with no option other than to completely restrict the non-essential international travel. A slew of hospitality settings, indoor, as well as outdoor are poised to be affected in the near term as lockdown guidelines will certainly disrupt the operations, as some governments may order such enterprises to completely shut their functions for a certain period of time.

The lockdown restrictions have done no good to any business, barring several sectors including real estate and essential retail. No matter how limited is the scope of restrictions, the overall business environment is likely to be affected in a broader way, effectively paving the way for elongated extended pessimism amidst the market participants.

In order to bolster the precautionary steps taken by the devolved administrations, the Downing Street administration has doubled funding set aside to tackle Covid challenges in the respective geographies. According to the fresh updates, the administrations can spend an additional £860 million to take necessary steps that are required to keep people safe.