GDP growth in December was now expected to be weaker than at the time of the November Report.
The forecast had been conditioned on an assumption that following the end of the England-wide lockdown and for the United Kingdom as a whole, the average level of restrictions prevailing in mid-October would take effect for the remainder of 2020 Q4. The government had announced a higher average level of restrictions in England, as well as stricter restrictions on hospitality within each tier, in response to rising virus cases.
This was likely to weigh on social consumption in December, with the Bank’s Agents reporting that Christmas bookings for hospitality venues had been significantly lower than in previous years, even before the announcement of additional restrictions. There had continued to be some positive offset from delayable consumption, for example from spending on technology, DIY and furniture, but other sectors, such as fashion and beauty, had remained particularly weak.