Economy Post Covid-19 – webinar with David Smith of The Sunday Times
On Wednesday 29 July, Trethowans hosted a webinar ‘The Economy Post Covid-19’ and welcomed prestigious Economist Editor of the Sunday Times, David Smith as a guest speaker to discuss and reflect on the economy post Covid-19.
David commented that the economy faced existing challenges affecting public finance prior to Covid-19 e.g. no productivity growth for a decade, and therefore, optimistically the economy could bounce back in approximately 1 year, however, a more pessimistic estimation would be 2-3 years.
He touched on two main risks to recovery of the economy; unemployment rates and rise in Covid-19 cases during the winter months. He mentions:
- There is a significant rise in unemployment to be expected as job retention schemes come to an end. The Treasury is very much against extending the furlough scheme
- A second national lockdown is unlikely, despite an expected increase in Covid-19 cases during winter, due to the fact that the government has time to prepare the NHS in advance
During the webinar, David also made the following points:
- Retail sales returned to their pre-crisis level in June, however, clothing sales are down by 1/3, food sales have gone up and 1/3 of purchases are now made online. Consumer services including hospitality, entertainment and travel have inevitably taken a huge hit
- Larger firms are looking at re-populating city centres, however, smaller businesses are discovering more efficient ways of working in the current climate
- £300-350 billion estimated to have been borrowed by the government this year in comparison £158 billion borrowed during the Great Recession in 2009. The Chancellor is likely to be keen to reform and simplify tax system
- David predicts that capital allowance may be introduced as a temporary measure as well as potential taxation for extra NHS funding
If you would like to watch the full webinar and hear David’s reflection on the economy, please click here.