Analysts warned city economies were suffering from the home working boom. Allan Monks, UK economist at JP Morgan, said the impact of remote working on face-to-face services was a “major concern” for the economy.
“Many people are no longer travelling to major cities, where there are many services that feed off of office-based activity,” he said. “This doesn’t just include restaurants and bars, but a broader range of businesses including gyms, dry cleaners, hairdressers, taxis and retail establishments.”
Mr Monks said some spending would have been transferred to the suburbs but that would likely bring a smaller boost to overall output. City centre consumer services are suffering a glacial L-shaped rebound, he warned.
Rishi Sunak, the Chancellor, has blamed the economy’s reliance on this “social consumption” for the UK being one of the hardest hit by the pandemic.
GDP plunged 22pc in a dire first half of 2020, a hit bigger than other major economies, except Spain. The Prime Minister changed the work-from-home advice from Aug 1, encouraging firms to bring employees back to offices if it was safe to do so.
But many businesses are waiting much longer before bringing workers back, piling the pressure on cities. Almost half of Britons worked from home in April.