Cities feel the strain as workers defy PM’s call to return to offices

The Prime Minister’s call for a return to offices in deserted city centres has been ignored as economists warn the remote working revolution could be hurting Britain’s recovery.

Live movement signals tracked by economists indicate that employees have not flooded back to workplaces since Government guidance was changed on Aug 1.

Google data tracking the movement of Britons found workplace activity remained down almost 50pc compared to pre-virus levels. There was no change from the end of July and it was down slightly from when Boris Johnson signalled the change in advice.

The UK’s biggest cities, including London, Manchester and Birmingham, have also seen only a marginal pick-up in movement around retail and leisure areas in the last month, with activity still only half normal levels.

Analysts warned city economies were suffering from the home working boom. Allan Monks, UK economist at JP Morgan, said the impact of remote working on face-to-face services was a “major concern” for the economy.

“Many people are no longer travelling to major cities, where there are many services that feed off of office-based activity,” he said. “This doesn’t just include restaurants and bars, but a broader range of businesses including gyms, dry cleaners, hairdressers, taxis and retail establishments.”

Mr Monks said some spending would have been transferred to the suburbs but that would likely bring a smaller boost to overall output. City centre consumer services are suffering a glacial L-shaped rebound, he warned.

Rishi Sunak, the Chancellor, has blamed the economy’s reliance on this “social consumption” for the UK being one of the hardest hit by the pandemic.

GDP plunged 22pc in a dire first half of 2020, a hit bigger than other major economies, except Spain. The Prime Minister changed the work-from-home advice from Aug 1, encouraging firms to bring employees back to offices if it was safe to do so.

But many businesses are waiting much longer before bringing workers back, piling the pressure on cities. Almost half of Britons worked from home in April.

Economists at Morgan Stanley said the UK was “notably lagging” in bringing staff back to the office amid strong demand for remote working.

Its survey earlier this month found just 34pc of office workers in Britain had returned, compared to 83pc in France, and 70pc or above in Germany, Italy and Spain. Two thirds of UK home workers want more days out of the office in the future.

“What is more likely to transpire in the long run is some kind of compromise between office and remote working, where employees and employers get the best of both worlds,” said Pablo Shah, economist at the Centre for Economics and Business Research.

He said changing work patterns could allow “people to work remotely in a variety of other locations”.