IMF Says U.K. Faces More Covid Curbs Unless People Vaccinate

(Bloomberg) -- Britain may be forced to implement more economically damaging coronavirus restrictions if the public doesn’t take up vaccination boosters to combat infections, the head of the International Monetary Fund warned.

Vaccines are “unquestionably an economic policy first order of magnitude,” IMF Managing Director Kristalina Georgieva said at a press briefing Tuesday. “We see the impact as very significant,” responding to concerns that the omicron variant will force another lockdown.

The government has brought in only limited restrictions so far, such as working from home and vaccine passports for large-scale events. The IMF said Chancellor of the Exchequer Rishi Sunak should be planning to reboot the furlough job support program if the virus get significantly worse.

“In the event of a virulent wave requiring widespread mandated closures,” the government should be “ready to deploy a subset of the most successful programs.” Those include furlough, which handed up to 80% of wages to those whose workplaces were forced to close during the pandemic. 

Furlough ended in September, having protected 11 million jobs at a cost of 70 billion pounds ($93 billion). The IMF said it “should not be part of the regular toolkit in the U.K.” but should be deployed for “very large, temporary, and non-structural shocks.”

Businesses are already calling for more support in response to the current restrictions, labeling the measures a “lockdown by stealth.” The Treasury is keen not to mandate closures because it will then have to expand the benefits it is paying.

Georgieva said the evidence was that a reliable economic policy to protect both growth and jobs was vaccination. “The correlation between the level of vaccinations and the speed of recovery is demonstrable in the U.K.,” she said.

She also pointed out that better health outcomes are significantly better for a country’s debt and borrowing dynamics, by supporting growth. 

However, she cautioned that the link between jabs and economic resilience may not be as strong if omicron can evade vaccines. “We don’t yet know,” she said.

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