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Snow paralysis could have cost the UK economy around one billion pounds in one day.

February 4th, 2009 by admin | Filed under Daily News, Employment, Money Management, Recession, Retail, UK Bank Accounts, UK Banks, UK Small Business.

The snow storms which paralysed Britain may have cost businesses already battling the credit crunch up to a billion pounds with more blizzards and attendant financial damage to be expected for the next few days.

Monday’s storms, the worst to hit the UK and especially the south of England are the heaviest in almost two decades. London, Europe’s financial capital, was less than four inches of snow. Enough to cause totally strangulation of the city’s transport system, shutting down road, rail and even air links.

Reports had it that one in five people were unable to show up for work on Monday, a cost to employers of over one billion pounds, and with the side effects caused by heavily diluted trading impossible to estimate.

Forecasts say that if the bad weather continues this week, that figure could rise to £3.5 billion in salary costs alone. Suggestions are that as a result of the blizzard, several thousand firms, already sadly weakened by the ongoing financial crisis, could go bankrupt as a result of the downturn in trade caused by the weather. A sign of how brittle the UK financial situation is.

With Britain in recession and facing what the International Monetary Fund (IMF) says will be the worst slump in the developed world, the rare cold snap risks putting many struggling businesses into the deep freeze for good.

To show that nature is still more powerful than the computer and is equally even handed the bad weather also hit other major European financial centres including France, Italy, Switzerland, Belgium and Spain.

However there are those that say, albeit tongue in cheek, that the current snap in cold weather could provide an upside for some economy sectors, particularly fuel suppliers, warm winter clothing manufacturers and retailers and UK panel beating companies.

The more somber UK economic analysts hasten to point out that disruptions to the business framework are the very last thing that the economy needs in its current extremely weak state.

Leaders in the UK business community, especially those in the South of England who are not used to such severe weather conditions and the disruption that it brings, were not slow to criticise the authorities for their lack of readiness to handle such an event. They claimed that television coverage of London at a standstill added very little to UK’s already tarnished image.
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