The geographical impact of the Covid-19 crisis on precautionary savings, firm survival and jobs: Evidence from the United Kingdom’s 100 largest towns and cities

In this commentary, we trace the economic and spatial consequences of the Covid-19 pandemic
in terms of potential business failure and the associated job losses across the 100 largest cities
and towns in the United Kingdom (UK). The article draws on UK survey data of 1500 firms of
different size classes examining levels of firm-level precautionary savings. On business failure
risk, we find a clear and unequal impact on poorer northern and peripheral urban areas of the
UK, indicative of weak levels of regional resilience, but a more random distribution in terms
of job losses. Micro firms and the largest firms are the greatest drivers of aggregate job losses.
We argue that spatially blind enterprise policies are insufficient to tackle the crisis and better
targeted regional policies will be paramount in the future to help mitigate the scarring effects of
the Covid-19 pandemic in terms of firm failures and the attendant job losses. We conclude that
Covid-19 has made the stated intention of the current government’s ambition to ‘level up’ the
forgotten and left-behind towns and cities of the UK an even more distant policy objective than
prior to the crisis.