Cold spell will cost £1.2bn per day, says insurer

Saturday, December 4th, 2010

Shops, restaurants and bars will be in the front line of business casualties as the economy takes a hit of £1.2bn a day during the cold spell, according to insurer RSA.

It predicts a “heavy financial toll” as the key Christmas shopping period is disrupted, entertaining becomes difficult and supply chains break down.

The insurance company was previously known as Royal Sun Alliance but, like Britain itself, waved goodbye to the sun long ago – and it says the consequences for the economy of a prolonged cold spell could be dire.

RSA director David Greaves said: “This cold front couldn’t come at a worse time for the UK. Bad weather in the run up to Christmas will have a major impact on the UK’s economy and could lead to significant losses for already struggling businesses.

“We’re due to see a rush of sales in December ahead of the VAT rise in the New Year, and many retailers are relying on these sales to see them through the traditionally quiet post-January sales period.

“If we lose just one fifth of our daily GDP through companies not being able to open and people cancelling spending plans on events and shopping we’re looking at about £1.2bn every working day.

“If the weather continues for the next two weeks, as the Met Office is predicting, this figure will quickly spiral to more than £12bn, dwarfing the hit we took in January this year.”

But there was good news for shopping websites, as RSA said predicted customers could be “forced off the high street and towards online retailers”.

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