Resolution Foundation


The UK corporate sector's recovery from Covid-19

UK firms have, like every other part of the economy, faced a huge economic hit from the Covid-19 pandemic. So, a key question is: what is the current state of British firms as we emerge from the pandemic? This matters because the nature and strength of the recovery depends on the health of the UK corporate sector.

Recessions can scar firms and harm their ability to invest, leading to a rise in debt-laden and unproductive firms. But some argue the pandemic-driven rise in working from home and firms’ adoption of new technologies will unleash a wave of new investment and productivity growth. The evidence so far suggests neither the pessimistic nor optimistic scenario will come to pass. The recovery in investment has been far slower than the wider economy, but that has not been driven by rising debt as the large-scale Government support protected firms’ balance sheets. Equally, the shift to working from home has been significant but so far there is limited evidence this will materially change productivity growth.


For all research queries about this report, please contact Jack Leslie. For press queries, please contact the Resolution Foundation press office.

Jack Leslie
Senior Economist
Resolution Foundation

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