To think that the economy won't just bounce back in three months?

[CloudsCanLookLikeSheep]

I am really worried about the long term effects of all this on the economy. BJ has sugarcoated it saying things will just bounce back when this is over and people start getting back to normal life. I think that's overly optimistic in the extreme. The normal flow of money has been seriously disrupted. Even those furloughed will be on 80% of pay not 100% and most people will be wary of spending on anything more than essentials during these uncertain times.

There may not be 'systemic' issues in the economy at the start but there sure will be in a few months time .Many people will default on debts and bills. Many companies will go out of business and it's all a big chain reaction.

We've never dealt with anything like this before in modern times, even during the spanish flu pandemic businesses weren't disrupted like this as there wasn't a welfare state so people had to keep earning.

I think the economic impact will take years to recover from and there will be no bounce back recovery, AIBU?

I also don't think the burden should be on income tax payers, we need to look at wealth too.

I also think it's prime time to consider NIC on unearned income such as dividends, property rentals, pensions, etc. Maybe not the same rate as workers, but at a lower rate at first. Personally, I think workers (especially middle earners) have been badly hit by student loan repayments, workplace pension deductions and child benefit claw back etc and can't realistically be expected to suffer even more deductions.

I can't see foreign travel being widely allowed again for a year or so, so I think UK tourism, pubs, restaurants and other leisure activities could actually bounce back quickly and benefit from people having UK holidays or UK days out once the lock down is eased.

Then again, everything is so interconnected, recession will hit everywhere at the same time.

Which is why things may not be so bad. Wealth is relative - money doesn't have an inherent value, it's based on comparison of wealth with other countries. If the virus only affected the UK, then we'd be absolutely screwed and bankrupt, but as it's affecting all continents and countries, our relative position with others may not change that much at all. I fear for weak economy countries like Spain and Italy which may never recover because they were weak beforehand, but the likes of Germany and UK had a pretty strong economy, so in a good position to come out of this not too badly affected. Of course, we're going to be badly affected, but probably not as bad as some countries.

I think every has to share the burden.

Everybody

Things is, no one here knows how it is going to pan out. Everyone is suddenly acting like they're experts in macroeconomics and epidemiology. The simple truth is: we don't know.

We know that there are a scary number of countries sliding towards insolvency and various humanitarian crises, which no one will be in a position to support because of their own economic contractions.

And of course.... there's Italy.

You don't need to be an economist to see this is not a good augur.

Poor Italy

Italy and Spain were already struggling economically so I can’t see them recovering quickly.
If, and this is a big if, the Government is able to keep propping up the real economy during the lockdown then there is a chance the impact won’t be dire.

So far the companies that are failing are companies that were on the edge of failure anyway. It’s when something unexpected falls over that panic might set in.
I wonder how the EU and Eurozone will function if Germany is stable but Italy and Spain are really struggling.

Things is, no one here knows how it is going to pan out. Everyone is suddenly acting like they're experts in macroeconomics and epidemiology. The simple truth is: we don't know.

Well I'm just basing it on the fact it took about 10 years for the economy to start to recover after the 08 crash. We slashed interest rates then, can't do that now.

I also think it's prime time to consider NIC on unearned income such as dividends, property rentals, pensions, etc. Maybe not the same rate as workers, but at a lower rate at first. Personally, I think workers (especially middle earners) have been badly hit by student loan repayments, workplace pension deductions and child benefit claw back etc and can't realistically be expected to suffer even more deductions.'

I agree & the burden is unfairly loaded on the young who have stagnated wages, higher education costs, living costs, unlikely to see a state pension or a free NHS when they are old. Corporations need to do there share but of course this requires global thinking.

We slashed interest rates then, can't do that now.

THIS

If, and this is a big if, the Government is able to keep propping up the real economy during the lockdown then there is a chance the impact won’t be dire.

Lots of vilification of anyone who's still working in any capacity outside of the government/supermarkets, though.

I hope it doesn't bounce back, since our economy is dependent on trashing the planet.

Whether we will end up with eco-fascism or a healthy, fair, and decent non-capitalist society is another matter though.

Lots of vilification of anyone who's still working in any capacity outside of the government/supermarkets, though absolutely this. Laura K on Twitter isn't helping either

I hope it doesn't bounce back, since our economy is dependent on trashing the planet.

Another worry - the young/woke Guardianista types might propose a one day a month lockdown to 'save the planet' when we see the relevant Co2 data. If this doesn't worry you, wake up.

I'm avoiding Twitter for my own sanity, I've been focused on online shopping/reading/Ozarks/my dog, who I've discovered is my soulmate.

Too much time on MN, though. Not good.

There will be a lot of pent up demand but the beneficiaries will be coffee shops, pubs, restaurants etc in the short term. I think many people will be cautious about holidays for a while and can’t see people rushing out to buy new cars etc.

Longer term the mindset of people could shift from spend spend spend to save save save in case it happens again. That is really bad for the economy if that happens.

I can’t see an economic recovery from recession to growth for at least 2 years. Could be much longer. Employers will have staff by the bollocks (male ones obviously) too so wage rises will slow right down again.

It’s not a great outlook.

To add to that, everyone with a pension has probably seen 15-30% wiped off their values.

I hope that the older generation who are hoarders of cash like no other, start passing this excess wealth down.

I think he's trying to boost morale tbh. No point stating the blatantly obvious when its only going to serve to make people feel worse. There's nothing to be done about it right now anyway.

I think we will be in a whole world of pain, interest rates never really went up to their historically normal levels after 2008, so we don't have any room to lower them.

I guess we will print more money, any one looking forward to a £20 loaf?

So what will be the plan for those that survive Covid 19 but end up with permanent damage to their lungs? They are going to need income.

Helena we have no idea what the long-term implications are of CV, but do you not understand that we are heading for major austerity?

The political rationale for Cameron's austerity was that the debt to GDP ratio had gotten too high. Johnson's Coronavirus intervention has caused it to jump from 2% to an estimated 9%. Meanwhile, people are shaming any 'non-essential' business for carrying on through Coronavirus.

Some people really can't see what's waiting right around the corner.

We won't just bounce back.

That's the plan.

Everything is fucked.

Money will go digital, no more paper cash. . and then? Surely they can just type the numbers on a screen into accounts? (And out of accounts) :/ Worst thing ever, freedom totally gone.

I agree with pp's : I actually think it 'could' be good. In some ways. Not in others.
I think it will be beneficial.

Yes it will be incredibly tough: economically for many years to come and people losing their jobs.

But it will make us look inside ourselves more and all this selfishness, the tatt we all buy, and Greta couldn't make us change our environmental ..... but now hopefully we will stop, for example flying around the world having stupid business meetings that could be done with a zoom call!!