Snow Costs UK Economy '£500m A Day'

Friday's heavy snow could cost the UK economy almost £500m, according to new research by insurance group RSA.

The bad weather continues to engulf the UK, with up to 30cm - or a foot - of snow expected in south Wales.

RSA based its findings on the economic impact of the severe weather conditions in December 2010.

At the time, the Office for National Statistics estimated the snow caused the UK economy to contract by 0.5% in the fourth quarter.

Jon Sellors, RSA's head of research, told Sky News the ongoing weather conditions had impacted businesses, schools and the transport system.

"We estimate that up to a third of the UK's workforce have been unable to get into work, which would cost the economy up to £473m.

"And if the bad weather continues, the economic cost is only going to get higher."

Ross Walker, UK economist at RBS, said there was an "obvious risk" snow would hit growth in the UK.

"This weather comes at a bad time - when the economy is growing at a 1% annual rate, it doesn't take much in any individual quarter to push it backwards," he told Sky News.

But he stressed it was important not to overstate impact of bad weather: "If you get a negative GDP figure because of weather then that is a one-off - it does not represent an underlying economic problem."

It comes amid fears that Britain's economy shrank in the final quarter of the year - with official figures due next Friday.

The industries most likely to be affected by bad weather are construction and retail, Mr Walker added.

At the end of 2010 - when heavy snow fell in some areas of the UK for weeks - construction was down by 3.3%.

"Construction is obviously vulnerable to bad weather, and retail could also get hit," he said.

"Although, if it snows so heavily that you don't go and buy a pair of shoes you want, you will probably go and get them when the weather improves."

But Douglas McWilliams, chief executive of the Centre for Economic and Business Research, said the snow could hit some businesses hard. 

"The economy isn't in great shape, and the retail sector isn't in great shape," he told Sky News.

"So even if in aggregate retailers don't lose out over a two or three month period, cash is king.

"If you lose a day's takings it may be the straw that breaks the camel's back."

The bad weather comes at a testing time for Britain's high streets, following a tough Christmas period.

Official retail figures were worse than expected, showing a 0.3% fall in total sales in December compared with the month before.

Since the start of 2013 three big names - Jessops, HMV and Blockbuster - have already been forced to call in the administrators.