UK 'baby bust' expected in 2021 due to COVID-19

LaToya Harding
·4 min read
Portrait of young pregnant woman standing by the window
As the ongoing spread of COVID-19 continues to affect employment and the wider economy, family planning could be negatively impacted this year as more people are postponing pregnancies. Photo: Getty

The UK could see a “baby bust” this year, with the annual birth rate dipping to the lowest level since records began due to the coronavirus pandemic, new figures have shown.

As the ongoing spread of COVID-19 continues to affect employment and the wider economy, family planning could be negatively impacted this year as more people are postponing pregnancies, PwC’s annual economic predictions report said.

Last year, the Office for National Statistics (ONS) revealed that 42% of people thought their household finances would get worse in the coming 12 months and, in a PwC survey from December, 19% of respondents stated that they expect to lose their job in the next year.

Nine months on, and with uncertainties continuing thanks to a new COVID-19 strain in the UK that is between 50% and 70% more transmissible, this is expected to translate into fewer births in 2021.

Employment fell at its fastest pace in a decade in 2020 from close to record highs a year ago. Since February, just as the pandemic hit, the number of payrolled employees has dropped by more than 800,000.

Meanwhile the claimant count — including those claiming unemployment and low pay-related benefits — rose by 64,300 to reach 2.7 million.

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Hannah Audino, economist at PwC, said: “A structural decline to the birth rate will depend on the level of scarring in the labour market and the pace of recovery. A longer recovery will reduce peoples’ expectations of their lifetime income, which could result in people deciding to have fewer children.

“The effects of lower births won’t be felt for decades, but if the pandemic causes a permanent decline in births, the long-term challenges associated with the UK’s ageing population, such as greater pressure on public services and lower economic growth, could be brought forward.”

Women are expected to remain disproportionately affected by the impact of the pandemic, the data showed, with the gender pay gap likely to increase in 2021. Last year, the Institute for Fiscal Studies (IFS) found that mothers are 1.5 times more likely to have quit or lost their job since the lockdown was imposed in March.

The report also revealed that 2021 will see the first decline in London's population this century. This has also been exacerbated by a shift away from city living, as people have been forced to work remotely and avoid the City, as well as reduced immigration and graduates arriving in the capital.

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PwC also looked into renewable energy and the UK’s fight against climate change in the report. It said that the majority of electricity generated in the UK this year could be from renewable sources, and one in eight cars newly registered in Great Britain are likely to be electric or hybrid.

Global green bond issuance is also expected to top $500bn (£366bn) for the first time.

The global economy in aggregate should revert to its pre-crisis level of output by the end of 2021, PwC said, and expand by around 5% in market exchange rates.

This would be the fastest rate recorded in the 21st century, however, the recovery will be uneven across sectors, countries and income levels and could be more bumpy than initially anticipated as the virus mutates and evolves.

Barret Kupelian, senior economist at PwC, said: “The Chinese economy is already bigger than its pre-pandemic size, but other advanced economies — particularly heavily service based economies like the UK, France and Spain or those focused on exporting capital goods, such as Germany and Japan — are unlikely to recover to their pre-crisis levels by the end of 2021.

“Once the virus is under control, policymakers’ attention will focus on laying the foundations for sustainable and inclusive growth with particular focus on creating jobs and pushing the green economy agenda. Business leaders will therefore have to think about how they can reposition their organisations so that they are better placed to exploit these exciting opportunities. Some of this will also inevitably involve upskilling their existing workforce.”

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