Economic modelling suggests that pandemic flu could reduce UK gross domestic product (GDP) by between 0.5% (£8.4bn) and 4.3% (£73.2bn) or more, depending on the severity of the pandemic and on people’s reaction; significant factors are whether schools are closed, and whether people choose prophylactic absence from work; adequate vaccination could reduce the maximum impact to about 1% of GDP.

Pandemic flu would have both direct and indirect costs: this paper reports an attempt to model the indirect effect on the UK economy of pandemic flu according to various scenarios, including severity of disease and public response. The authors comment that there were three major flu pandemics in the last century, as well as three significant disease outbreaks this century (SARS, H1N1 flu, and H5N1 flu) and that such outbreaks will have economic as well as health costs. They constructed their economic model to explore the effects of various factors related to a flu pandemic on the UK economy: factors included were pandemic severity, vaccine efficacy, school closures, and prophylactic absenteeism. Main outcomes were the economic impact of the various scenarios specified in terms of gross domestic product, output from different economic sectors, and equivalent variation.

The costs related to illness alone ranged between 0.5% and 1.0% of gross domestic product (£8.4bn to £16.8bn) for low fatality scenarios, 3.3% and 4.3% (£55.5bn to £72.3bn) for high fatality scenarios, and larger still for an extreme pandemic. School closures are a significant factor in a low fatality scenario because of the withdrawal from the workforce of a significant proportion of those caring for school-age children (estimated about 16%). In a high fatality scenario, prophylactic absenteeism would have a major impact (although with low health gain). Any vaccination has a beneficial effect, least from a pre-pandemic vaccine and most from two doses of a matched vaccine. Two doses of a matched vaccine at 60% coverage would mitigate the impact to about 1% of GDP even under the most extreme severity.

The authors conclude that according to their model, balancing school closure against "business as usual" and obtaining sufficient stocks of effective vaccine are more important factors in determining the economic impact of an influenza pandemic than is the disease itself. Prophylactic absence from work in response to fear of infection can add considerably to the economic impact but has relatively small health benefit. They note that while the current strain of H1N1 influenza seems to be highly infectious it does not generally cause severe illness, hence it has had only a limited economic impact so far. They caution that the model includes many assumptions, and that for many of these the evidence is less than perfect.

An accompanying editorial comments on the paper, noting that the worst case would double the drop in output already seen due to the current financial crisis. The author hopes that the results of the model will help policy makers to plan for the pandemic to minimise disruption to the UK economy and to the NHS.