A V shaped recovery?

Andy Haldane at the Bank of England is an optimist thinking we will experience a quick V shaped recovery. A V shaped recovery implies that the output and incomes we lost in the three months of downturn will be replaced in the following three months. One side of the V, the fall, should be balanced by the other, the recovery.

This requires very fast rates of growth in jobs, output and incomes. If we take the overall downturn as 20% then you need a 25% recovery to get back to where you were. For those badly affected sectors that suffered a halving of their turnover, they need 100% growth from the bottom to recover fully. With car sales down 99% at worst, they need to recover by 10,000% to get back to the start.

There will be fast rates of growth for the sectors coming out of lockdown. It is curious the so called PMIs, the surveys of orders and output undertaken month by month, are not stronger than they are. They are meant to measure the rate of change from the previous month, so where that was very depressed you would expect a very fast rate of growth to recover. Maybe people filling in the forms have allowed general mood to influence their replies,and have not allowed enough for recovery.

The problem is many of the worst affected sectors will not get back anytime soon to where they were, because social distancing and changed patterns of work and leisure behaviour means less business for them. Some entertainment and sports venues will remain closed to audiences for the rest of the year. Some shops will not re-open. Some bars and restaurants will have to accept far fewer customers to allow social distancing.

It is true some businesses will record growth taking them above the levels of January. On line everything will be doing more. Some things will benefit from a rush of sales as people catch up with delayed haircuts or postponed home and car buying. This is unlikely to be sufficient to make up for the weakened areas this year, so I fear we will end the year lower than we began. Full Recovery will take longer.

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173 Comments

  1. Mark B
    Posted July 7, 2020 at 5:26 am | Permalink

    Good morning

    Am I to take it that this ever so bright gentleman is not only willing to put his reputation on his ‘prediction but also his livelihood as well ?

    I do not know about anyone else but, I am heartedly sick of these experts. Just tell us the lottery numbers if you really want to impress us mate !

  2. Lynn Atkinson
    Posted July 7, 2020 at 5:33 am | Permalink

    Taxes must be slashed to help us through this ‘crisis’ – ‘to save the Economy’.

    The Chancellor, having announced a drop in Stamp Duty needs to implement it as of today to avoid ‘locking down’ all property sales.

    VAT on new cars should be zero rated to encourage those who can buy to buy.

    CGT MUST be calculated from the same dates for British residents as for foreigners, i.e. April 2019 (at worst), to encourage the ‘redistribution of assets‘ into the hands of those who can exploit them. We can’t afford to have assets lying about wasted.

    The government must tighten it belt because the State sector is the only sector incapable of generating wealth, although it can sop up all our liquidity into fallow projects.

    • Sea Warrior
      Posted July 7, 2020 at 6:55 am | Permalink

      I’m unconvinced about a reduction in Stamp Duty. A reduction in VAT for cars has a certain attraction. A reduction of VAT for the hospitality sector is a no-brainer. Destroyed businesses yield no taxes – just costs to the Treasury. But Sunak needs to have a sector-by-sector analysis ready before acting. I hope that the Civil Service, working from home, has been able to give him the requisite support.

    • NickC
      Posted July 7, 2020 at 10:19 am | Permalink

      Lynn, The government knows what should be done to encourage recovery, but won’t do it. Foreign aid, PHE, HS2, “smart” motorways, many Quangos, should all be scrapped. Laws and especially tax laws, should be drastically simplified. Taxes need to be cut. The Army should not be cut, especially running into massive, southern EU style, unemployment.

      • Turboterrier
        Posted July 7, 2020 at 2:09 pm | Permalink

        NickC

        +1

    • Lifelogic
      Posted July 7, 2020 at 10:21 am | Permalink

      Why encourage people to buy new cars perhaps their old one is just fine? It is the car producers job to persuade people to buy new cars (by producing products people want to buy). Alas the government is getting in the way and effectively “forcing” car manufacturers to produce cars that most people do not really want to buy.

      Why buy something new if it might be banned soon or is very expensive, rapidly depreciates and only goes 100 miles before needing recharging for 4 hours?

      • Fred H
        Posted July 7, 2020 at 7:56 pm | Permalink

        exactly – most cars will be made over in the EU, no good to UK.
        Create a long list of VAT free items DIY, insulation, kitchens, bathrooms, sheds, garden rooms….
        Raise VAT threshold – £120k?
        Increase nursery grant, raise minimum wage, raise personal allowance by £1k.
        STIMULATE economy !

      • czerwonadupa
        Posted July 7, 2020 at 8:16 pm | Permalink

        Many councils with the mayor of London & TfL leading the way are vehemently opposed to people using their cars as can be seen by their draconian charges, parking restrictions & in the case of the mayor & TfL reducing hundreds of road widths to single lane. ie Hyde Park from 4 to 1 but the road signs still indicating 4. And they wonder why city centres have become run down.
        And dieselgate could be applied to our governments alongside VW who encouraged people to buy diesel only to change their minds & now want to restrict them. With the dramatic decline the consequence.
        Many seeing the inaction of the police in London & Bristol have already decided in London to break the law by riding eScooters on the road & pavements especially as it seems this government seems to be leaning towards allowing them on our roads without, like cyclists, having to undertake any road knowledge like drivers & motorcyclists are forced to undertake at great cost.

    • Mike Wilson
      Posted July 7, 2020 at 11:59 am | Permalink

      The housing market where I live seems to be defying gravity. As well as the young lad – in the market for his first house – who told me yesterday that houses are going for over asking with multiple offers and even closed bids, I note this morning on my walk round the town with the dog that several houses with For Sale signs outside them for months have, in the last few days, changed to Sold. I don’t think you need to worry about the housing market.

      The government must tighten it belt because the State sector is the only sector incapable of generating wealth

      Patently untrue. How would we function without the state sector having built roads around the country? How would we function without law and order? How much better off would we be, collectively (therefore, wealthier), if the government borrowed money at almost zero interest rates and built 15 nuclear power stations and let us all have cheap and green electricity.

      That said, of course government is inefficient and wasteful because for so many employed within the state sector it has become a gravy train.

      • Lynn Atkinson
        Posted July 7, 2020 at 8:24 pm | Permalink

        Sunak had announced the drop in Stamp Duty. I did not urge it on him. His mistake was intending to implement it in August thereby crashing all the chains of sales going through at the moment.
        He has been put right and now intends to implement it immediately.
        All property outside big cities is flying out the door because people are terrified of stagflation, and being caught in the cities, nobody wants to be caught off the housing ladder.
        Building infrastructure does not generate wealth. It provides the private sector with the means to create the wealth that everyone, including the entire State Sector, lives on.
        You could say that the single key worker upon whom everybody else lives is John Bull. Dawning on many politicians VERY late in the day.

    • Turboterrier
      Posted July 7, 2020 at 2:05 pm | Permalink

      Lynn Atkinson

      VAT on new cars should be zero rated to encourage those who can buy to buy.

      More than that Lyn.

      Remove the envy tax on all British built vehicles over £45k.

      Remove the high rates of VED based on car emissions.

      Get the taxation back from the manufacturers, and their employees that will have to be increased to meet the demand. The more competitive we can make our own vehicles the more they will sell. It must be better surely to get people back into work paying taxes than paying them unemployment benefits and all the other handouts that can lead to.

      The government could help by passing laws that making civil service, public service, councils and funded charities have to buy British to keep their fundings and support, and the only thing to get us out of the hole we find ourselves is getting the British population back to work. Government money is our money and they should be cutting out waste and have a much firmer hand on the tiller in these times of stormy waters.

      • Fedupsoutherner
        Posted July 7, 2020 at 4:33 pm | Permalink

        Well said Turbo

      • Lynn Atkinson
        Posted July 7, 2020 at 8:27 pm | Permalink

        We could encourage our own motor industry to start up again. Our designers are the best in the world. All our classic cars are desirable as opposed to the dull uniformity we are faced with these days.
        We could be a world beater in motors again, easily, if the politicians would concentrate on attempting to do their own jobs well, and get off our backs.

  3. Andy
    Posted July 7, 2020 at 5:41 am | Permalink

    I don’t doubt that many services and online businesses – which can be done largely from home – will bounce back quite quickly. Indeed many of these might bounce back better if the have learned that working at home can be more productive.

    This could, in turn, lead to benefits elsewhere – less traffic, fewer commenters which could help other areas.

    But you only have to take a walk down any high street to realise this is not a V shaped recession for many. One bustling businesses are now dead. Cafes are empty. The length and depth of the lockdown is causing carnage. And our lockdown was so long and deep because in February and March, the government totally failed – preoccupied as it was with a headbanger Brexit that nobody voted for.

    Incidentally yesterday a Leave group tried to blame Remainers for how embarrassingly badly Brexit is going. And Johnson sought to blame care homes for the COVID disaster he inflicted on them. The public inquiries will reach different conclusions. A haircut can not fix this mess of a prime minister and mess of a government.

    • Edward2
      Posted July 7, 2020 at 2:43 pm | Permalink

      In the whole if February there were 18 cases out if a population of 70 million.
      You are being ridiculous to think any Government would go into lockdown at that time.
      March 12th was the first time there were over 100 cases on one day in the UK .

      • a-tracy
        Posted July 8, 2020 at 1:08 pm | Permalink

        Edward I agree I don’t think people would have been willing to close down all the businesses in late February early March BUT there were tv programs about the care home crisis in Italy and death spikes in the over 70s, many left to die at home alone with volunteers in virtual hazmat suits to try to make them comfortable in their last days. If I ran a care home I wouldn’t have needed telling to use ppe and more regular hand washing, I saw a care home on the news in early March without a care in the world pushing their elderly relatives together in group activities and letting tv reporters come in and interview them sticking furry mikes in their faces which I’d bet weren’t washed from care home interview to care home interview.

        I’m interested in the care homes that did well and what action they took early, how they got their ppe, what stage did they ban close relative visits, how many agency staff going from home to home did they engage, how many lived on site to care there were many brave, loving and caring women I saw doing this. How did the small privately run homes do compared to the big major conglomerates, how do their pay rates compare because I know homes that pay much more than the nlw per hour. These homes are paid a fortune per week per resident especially if they’re offering extra dementia care which I read 75% of residents are registered with.

        • Edward2
          Posted July 8, 2020 at 7:09 pm | Permalink

          The key decision was by the NHS/PHE to empty as many beds as possible of elderly patients and get them back into care homes.
          Were they fit enough to be discharged?
          Were they properly tested before being sent home?
          Questions need to be answered.

    • Lynn Atkinson
      Posted July 7, 2020 at 8:29 pm | Permalink

      😂😂 Brexit that nobody voted for! 17 million voted to LEAVE TOTALLY, there was no ‘Flexit’ option. Man up Andy, if you can.

  4. oldtimer
    Posted July 7, 2020 at 5:44 am | Permalink

    I too doubt it will be V shaped. Some businesses have stopped trading altogether (by choice or by going bust). Others are dependent on world trade which is down and is likely to stay down while the pandemic spreads.

    • IanT
      Posted July 7, 2020 at 9:07 am | Permalink

      Some Restaurants and Pubs will not reopen and some segments of the marketplace (e.g. the grey pound) will be absent for a good while – but fewer venues will attract those still willing (mostly the young) to eat out and socialise in public. So some businesses will pick up quickly but some will clearly not do so.

      For example, many Garden Centres that rely on older customers using their cafes/restaurants will not bounce back as quickly as those venues focused on a younger set. Much as it might be nice to have a new car, many older people might prefer to keep their cash in their Rainy Day fund – especially if their current vehicle is not being used very much at the moment and the choice of replacement is restricted in choice and expensive.

      So it will be a mixed bag with winners and losers dependent upon how a business was set-up to work before the crisis. Those that were already falling behind will have little to comfort them in any recovery to come whatever its shape.

      IanT

      • a-tracy
        Posted July 8, 2020 at 12:59 pm | Permalink

        £10 off per meal from Mon to Wed per dinner ding dong, they’ll come out and dine now, especially if the pubs have an over 60’s day with no children (that’s the people that I knows biggest concern asymptotic children).

    • NickC
      Posted July 7, 2020 at 10:21 am | Permalink

      Oldtimer, One thing we can depend upon: all the Remains who agitated for ever more, and harsher, lockdown will now accuse the government of ruining the economy – because of lockdown.

      • villaking
        Posted July 7, 2020 at 9:34 pm | Permalink

        @NickC: don’t presume there is a correlation between remain supporters and lockdown supporters. I am pro EU and very, very anti-lockdown. Lifelogic, for example, is a brexit supporter and was pushing for lockdown in March. The two issues are unrelated

        • NickC
          Posted July 8, 2020 at 8:06 am | Permalink

          Villaking, Yet you are the first Remain on here who has stated an oposition to the lockdown. All the rest vehemently demanded more, earlier, and harsher lockdowns.

          • Martin in Cardiff
            Posted July 8, 2020 at 5:48 pm | Permalink

            Correction.

            We demanded that the Government do *something*, rather than *nothing*.

            Lockdown was at least that, and had some effect.

  5. Lifelogic
    Posted July 7, 2020 at 5:58 am | Permalink

    Well it quite easy to enhance (and speed up) the recovery hugely. We just need far smaller government, lower simpler taxes, cheap energy, freedom and choice and a bonfire of red tape. Unfortunately the Boris government still seems to be mainly a tax, borrow, regulate and piss down the drain socialist one. Sunak & Boris even think employing even more people in job centres (and even HS2) is a good plan. I hope Sunak will do something sensible tomorrow for a change (he did read PPE so I suppose it is rather unlikely) but ones lives in hope. I suspect it will be little more than a temporary gimmick/distraction or two.

    • Lifelogic
      Posted July 7, 2020 at 6:07 am | Permalink

      It seems Sunak is going to raise the stamp duty threshold to £500K – but only in the autumn. Great way to kill all sales below £500K for the next few months mate! Can you really not see this?

      Matt Ridley is exactly right in his blog.

      FORGET THE DOOM AND GLOOM. THE RETREAT OF COVID-19 IS A GREAT CAUSE FOR OPTIMISM

      Death below the five year average and non Covid deaths about 10% below. As I said before when doctors & surgeons go on strike the initial effect (at least) is a decrease in deaths.

      • NickC
        Posted July 8, 2020 at 8:18 am | Permalink

        Lifelogic said: “As I said before when doctors & surgeons go on strike the initial effect (at least) is a decrease in deaths“.

        Not according to the ONS. In the first 4 months of this year there were 12,900 excess deaths which were not ascribed to covid19.

        It is of course perfectly possible that for some of those deaths covid19 was present but not diagnosed. It’s also possible that some of the deaths diagnosed as having covid19 present did not occur because of covid19. It’s all rather less mechanistic than you suppose.

        • Martin in Cardiff
          Posted July 8, 2020 at 5:55 pm | Permalink

          Your list of excuses for your masters is growing, I see.

          So let’s see:

          “New Zealand and Australia have more sheep than people”

          “Everyone else who claims to have beaten the epidemic is foreign – i.e. non-English speaking – and therefore cannot be believed”

          Now, however, people realise that whatever rubbish doctors are ordered to put on death certificates there is still this awkward figure of excess deaths over normal expectations. So you’ve gone on the attack there, with your water-muddying claims invented out of thin air like the rest.

          Just like the “Rotterdam effect” (about 2% of UK trade shipped to the European Union passes through it – hardly a major part).

  6. Bryan Harris
    Posted July 7, 2020 at 5:59 am | Permalink

    To achieve a 3 month economic recovery, that would be most welcome, we have to forget all about lock-down and associated ills.
    It’s optimistic, and should not be held up a goal, for if this fails to happen then the government will be accused of all sorts of things.

    Let’s just concentrate on putting this virus behind us – with no thought or acceptance given to the ‘NEW NORMAL’ an effort by some to keep us in a form of lock-down forever, — and concentrate on building up the economy so that we can all flourish and prosper.

    • Jim Whitehead
      Posted July 7, 2020 at 9:25 am | Permalink

      +++ emphatically agree

      • Lynn Atkinson
        Posted July 7, 2020 at 2:06 pm | Permalink

        Me too! Pointless living in fear of death because it will get each and every one of us. The death rate is always 100%

        • IanT
          Posted July 8, 2020 at 8:41 am | Permalink

          Very true Lynn – but personally I’m in no hurry to get there early…

    • Mike Wilson
      Posted July 7, 2020 at 11:54 am | Permalink

      How do we ‘put the virus behind us’? Do you mean – ‘forget the virus, go back to normal and let it do its worst?’. If so, I agree with you. I have thought that from the start.

      • Bryan Harris
        Posted July 8, 2020 at 6:27 am | Permalink

        @Mike — YES

        By all means allow those that want to stay in their homes or wear fallible masks to do so… But there can be no imposition by law of any kind.

        Show people how to be more healthy to try and shake off the virus when it comes their way – Improve treatments — BUT NEVER EVER FORCE US TO LIVE IN FEAR OR BE RULED BY THOSE USING THE VIRUS AS A WAY TO DESTROY OUR SOCIETY.

    • Ian Wragg
      Posted July 7, 2020 at 3:50 pm | Permalink

      My new normal will be the OLD normal. At almost 75 I have no intention of cowering away in the back garden.
      A week on South Coast paid for in August with 25,% discount and a cruise paid for in October for 3 weeks.
      I didn’t spend 9 years at sea and 20 plus years in the African Bush and Arabian desert to be confined to barracks by a bunch of snowflakes.

      • Bryan Harris
        Posted July 8, 2020 at 6:29 am | Permalink

        That is the spirit Ian

    • James Bertram
      Posted July 7, 2020 at 8:53 pm | Permalink

      Glad someone’s got some common sense left, Bryan.
      Well said.

  7. Ian @Barkham
    Posted July 7, 2020 at 6:01 am | Permalink

    Of topic – Barnier ‘EU willing to allow UK to break from Common Fisheries Policy’.

    He still doesn’t get it. We left the EU and its institutions. What the UK does through its own democratic process creating, amending, repealing its own laws and rules is nothing to do with the EU. In the same way, what the EU does in its own backyard is nothing to do with the UK. Yet he by implication still believes the EU rules the UK.

    Its nice when harmony exists, but the individual democratic process is more important.

    • Sea Warrior
      Posted July 7, 2020 at 6:57 am | Permalink

      If there’s one Brexit book that I will make a point of buying next year it will be the one to be written by – Barnier! It will be more illuminating than any other.

      • Dennis
        Posted July 7, 2020 at 4:50 pm | Permalink

        JR, you attended and spoke at Online Conference
        Friday, 3th Jul for the Bruges Group.

        Can we have news about it please?

      • Fred H
        Posted July 7, 2020 at 7:58 pm | Permalink

        the very LAST book I’d buy.

        • Fred H
          Posted July 7, 2020 at 7:59 pm | Permalink

          Would Sir John consider releasing his memoirs NOW, please?

    • Andy
      Posted July 7, 2020 at 7:06 am | Permalink

      You left the EU last January – and yet you are still moaning.

      Fish are a shared resource. And under international law the UK is obligated to negotiate fishing arrangements with its neighbours. These must include historic fishing rights. And the awkward fact is that British fishermen have been fishing in continental waters for centuries – and vice versa.

      Also, consideration must be made of the fact that the Thatcher government allowed British fishermen to sell off rights to fish in British waters to foreign vessels. They did this because fish in British waters were, at the time, not considered to be valuable as Britons did not eat them. It’s only after the formation of the single market when we established we could sell British produce to the continent – and that they wanted it and liked it – that anybody cared about British waters.

      In any case of you don’t do a deal on fishing the Europeans will simply make it so hard for British fishermen to sell fish to the continent (where most of their catch currently goes) – that many will go out of business anyway.

      Welcome to the grown up world where policy by hissy fit doesn’t work.

      • Fred H
        Posted July 8, 2020 at 6:05 am | Permalink

        Andy all you ever write is moaning. Boring.

      • NickC
        Posted July 8, 2020 at 9:57 am | Permalink

        Do we believe a pub-bore Remain or what we read for ourselves in the WA and UNCLoS? That’s not so hard to choose, is it, Andy?

    • ukretired123
      Posted July 7, 2020 at 8:50 am | Permalink

      Agree the example of Hong Kong Vs China shows Freedom is paramount in UK v EU.

    • NickC
      Posted July 7, 2020 at 10:24 am | Permalink

      Ian, If only we could depend on Boris being robust enough to send Barnier packing, then the EU empire’s posturing would be funny.

      • Ian Wragg
        Posted July 7, 2020 at 3:52 pm | Permalink

        thank the lord we have Dom pulling the strings. He knows what’s needed.

      • czerwonadupa
        Posted July 7, 2020 at 8:26 pm | Permalink

        Boris is no Wałęsa who with the help of people showed the rest of eastern Europe the way to free themselves from the Soviet block.
        Barnier & the other panjandrums in Brussels remember, which is why they’re fighting tooth & nail to prevent the same happening to their empire.

    • John Hatfield
      Posted July 7, 2020 at 12:02 pm | Permalink

      Written by a remainer.

    • multiID
      Posted July 7, 2020 at 1:25 pm | Permalink

      As far as I know it’s about the level playing field now- fisheries accounts for very little in the overall scheme and especially when matched with financials, goods and services for instance- something to be aware of- that’s if we want to have a future with them. The more we diverge from the EU accepted norm, as they see it, then the less chance of getting a favourable deal. But perhaps we don’t want a favourable deal- perhaps we don’t want any deal? after all we just voted to leave- anyway thinking now is that Barnier will be there in situ until 31st December only as his contract will be up by then so there’s little point in saying more.

      • Lynn Atkinson
        Posted July 7, 2020 at 2:09 pm | Permalink

        Fisheries account for very little – because the industry was given away. The French/Portuguese/Spanish/German fishing does Not account for very little and it’s OURS! We DEMAND it back in full. Boris better listen up!

  8. Roy Grainger
    Posted July 7, 2020 at 6:08 am | Permalink

    What is Andy Haldane’s track record for making accurate predictions ? As he seems to have worked at the BoE for his entire career I can guess.

  9. Will Jones
    Posted July 7, 2020 at 6:11 am | Permalink

    End social distancing now. The epidemic is over. The virus is in retreat. Collective immunity has been reached.

    • Sea Warrior
      Posted July 7, 2020 at 6:58 am | Permalink

      No, it hasn’t. The virus has just had it’s first near miss with an elderly relative of mine. Wear a mask, social-distance and wash up!

      • Mark B
        Posted July 7, 2020 at 3:33 pm | Permalink

        Elderly. Not everyone glad into that category and should not be locked up and denied a living.

    • Lifelogic
      Posted July 7, 2020 at 7:08 am | Permalink

      It seems so (in most areas anyway). Also survival rates have more than doubled. Matt Ridley Blog is sound on this.

      Idiotic of Boris to try blame nursing homes over “incorrect procedures”. It was his idiotic government, NHS England and the NHS who idiotically dumped thousands of infected, often untested and many known positive patients from hospitals into them. Like putting foxes in the hen house.

      Deaths in care homes in Germany were only one 1/13 of those in the UK. Must be about 13,000 death caused/advanced by this insane policy. Why are we governed by such damn fools?

      • Martin in Cardiff
        Posted July 8, 2020 at 5:57 pm | Permalink

        Because you voted for them.

    • M Hopkins
      Posted July 7, 2020 at 7:58 am | Permalink

      Well said Will Jones and Bryan Harris.

    • zorro
      Posted July 7, 2020 at 10:35 am | Permalink

      Oh absolutely, but I fear that we will be in the middle of the pandemic for a long time until apologies and reconciliation is made. THis government has painted itself into a hole.

      zorro

    • Mike Wilson
      Posted July 7, 2020 at 11:53 am | Permalink

      The virus is in retreat.

      How do you work that out? We have had massive disruption to our lives from the lockdown. No socialising. No pubs. No cafes. No restaurants. No cinema. No hairdressers. Etc. And the transmission of the virus has slowed. Surprise! Surprise!

      And you think it is ‘in retreat’. Very strange.

    • Lynn Atkinson
      Posted July 7, 2020 at 2:09 pm | Permalink

      Agreed, you have proven your point throughout. Need to be SAGE!

    • Martin in Cardiff
      Posted July 9, 2020 at 6:42 am | Permalink

      What, with just a maximum of seven percent of the people having been infected?

      But your wish is being granted. The Government and its tame media are encouraging the people to behave as if the nonsense that you claim were true.

  10. Sea Warrior
    Posted July 7, 2020 at 6:12 am | Permalink

    ‘A V shaped recovery implies that the output and incomes we lost in the three months of downturn will be replaced in the following three months.’ Uhhh? Surely the output and incomes lost is, er, lost. A V-shaped recovery gets any economy back to where it was but after taking a one-off hit. I wish I could prove this by some impressive Calculus action but it’s too early in the morning.
    Sunak has probably finished his planning for his economic recovery measures but I hope he keeps his eye on one thing: he needs to concentrate on saving the existing economy rather than throwing buckets of borrowed of cash at hare-brained schemes like Net Zero.
    P.S. I have three ‘locals’. As at Saturday, one opened, one shows a worrying lack of life, and one is planning on opening on the 18th. My suspicion is that late delivery of information by government is a factor in the late/non-openings. This aspect of the Covid-response needs to improve. (Conversely, the flow of information from Gov.UK about the end of the Brexit transition seems much better.)

    • Lynn Atkinson
      Posted July 7, 2020 at 2:11 pm | Permalink

      That’s why you need 25% increase to offset 20% loss. That’s the v required to get back to where we would have been without the Panicked Govt.

  11. jerry
    Posted July 7, 2020 at 6:14 am | Permalink

    I fear, but hope not, recovery will be more “Vv” (or worse vV) shaped, double dipped due to unlocking some higher risk sectors to quickly and causing spikes or a general second wave epidemic, ideal we should be aiming for a U shaped of recovery.

    At least three Pubs across England have already had to close again, customers or staff testing CV19 positive since, obviously either pre-symptomatic or asymptomatic before 6am Saturday…

    • a-tracy
      Posted July 7, 2020 at 8:44 am | Permalink

      Which are the higher risk sectors you feel have been unlocked too early?

      If I were a journalist I would want to know what the visitors to the pub that tested CV19 positive were doing in the three weeks before. Why did they get a test so quickly after going to the Pub if they felt they required a test why did they go out and put others at risk if they suspected they had the virus. This seems rather odd to me.

      • jerry
        Posted July 7, 2020 at 4:04 pm | Permalink

        @a-tracy; Regards your first question, the ones unlocked last weekend, my concerned have been expressed on this site since these unlocking’s were announced.

        As for testing, shouldn’t venues be notified if a customer shows symptoms, not wait to actually return a positive test? The people concerned might not have actually picked up the virus at the Pub or restraint but by the weekend they might have been pre-symptomatic – remember symptoms can take 14 days to show, hence the 14 day self isolation for those in the household group of someone with CV19.

        Thinking about it though, unless there was a typo in the initial media report (mixing up having been tested vs. are going to be tested) that has since been repeated as fact, I suspect some have behaved irresponsibly here, surely they must have been been tested sometime last week and were thus waiting for the results when they visited the pubs…

        • a-tracy
          Posted July 8, 2020 at 8:16 am | Permalink

          I’d go further than that Jerry if people went out having been tested for covid19 or were off work isolating and were waiting for results and they breached the clear guidelines about totally self-isolating for fourteen days and put other visitors to the pub they chose to go to in risk they need fining and a warning, perhaps if people in the pub lost money over this they could take a personal prosecution against this person who had a test for their losses.

          You wouldn’t get a test unless you had symptoms would you? Or i wonder if this is regularly tested people like health workers? This is a perfect experiment to really drill down on how this spreads from one pub, the test and tracers should concentrate on this because if everyone in the pub were physically distanced how could it spread?

          • jerry
            Posted July 8, 2020 at 5:26 pm | Permalink

            @a-tracy; They could always be tagged, like those on early prison release, leave the house and its an automatic fine….hmm!

            There is a fine line between carrot and stick, most people who present for testing do so voluntarily, to much stick and those who might be tempted to break self isolation rules would likely never get tested.

    • matthu
      Posted July 7, 2020 at 9:55 am | Permalink

      How can the number of people testing positive be independent of the number of tests carried out?

      Is it not significant that 8 out of 9 of the testing sites in Leicester were opened after mid-June and that coincides with an increase of positive testing results?

      How many of those with positive results had no symptoms?

  12. Nigl
    Posted July 7, 2020 at 6:16 am | Permalink

    I see the track and trace app still has no end date, people are still at risk and still no one fired because of the obvious incompetence.

    Sort that out, give us the info we have been pleading for, for months, stop treating us like children and the FOGO, starts to reduce, normal activity resumes and so does the recovery.

    You are trashing hospitality and entertainment for no reason. If masks are effective on public transport, why can’t I sit next to someone wearing one at a sports or music event.

    Lions led by donkeys springs to mind.

  13. Ian Wragg
    Posted July 7, 2020 at 6:25 am | Permalink

    Until some of the bizarre regulations are relaxed, jobs will continue to be lost. You can have your hair cut but not your nails.
    You can’t go to gym or play sport.
    Micro management of the population doesn’t look good.
    Time to repeal all thar emergency regulation.
    Local councils are using it as an excuse to disrupt traffic and more.

    • Lifelogic
      Posted July 7, 2020 at 6:45 am | Permalink

      As you say:- Micro management of the population doesn’t look good.

      Indeed it never does. Decisions obviously need too be taken as close to the coal face as possible. The people near the coal face have the relevant facts and resources to do the job.

      • Lifelogic
        Posted July 7, 2020 at 6:47 am | Permalink

        Well the would have the resources if they were taxes less and suffered from far, far less red tape.

    • Peter Wood
      Posted July 7, 2020 at 6:48 am | Permalink

      To fill in the gaps of your point. It would appear that the government has done the calculations; they now know what the death rate is likely to be and in what demographic. The decision: Cost of deaths v cost of shutting down the economy for an extended period until a vaccine. The government will accept a higher death rate (since its mostly in the older part of the population) to bring the economy back up to near normal.

      • Lynn Atkinson
        Posted July 7, 2020 at 2:13 pm | Permalink

        It’s a lower death rate. The Govt can’t volute face because it gives away its own idiocy throughout.

        • jerry
          Posted July 8, 2020 at 6:14 am | Permalink

          @Lynn Atkinson; There is not a lower deaths rate from CV19, there are no previous figures to compare! The seasonal Flu deaths, that preceded the CV19 outbreak, were average, whilst the total death rate has fallen because other deaths (such as car and occupational accidents) have been slashed by the effects of the lock-down.

      • jerry
        Posted July 7, 2020 at 4:16 pm | Permalink

        @Peter Woods, “[we should] accept a higher death rate (since its mostly in the older part of the population)”

        Such a comment, had it not been about the economy, is one i woudl have expected from the likes of “Andy” with his hatred of the UK older and retired population…

        We should not accept such thinking and I doubt many will, if such a deed is done the bereaved younger relatives will not forget and nor will the opposition, if the govt really is putting such a calculation before common sense and decency they will be toast come the next GE, even one four and half years away.

    • Sea Warrior
      Posted July 7, 2020 at 7:01 am | Permalink

      I agree with some of your points. My local HWRC is still, inexplicably, imposing silly control measures, leading to delays. The measures are explained by workers, not wearing masks, getting within 2 metres of drivers!

    • Lifelogic
      Posted July 7, 2020 at 7:10 am | Permalink

      Surely most people can cut or clip their own nails or their partners can’t they?

      • SM
        Posted July 7, 2020 at 4:10 pm | Permalink

        If you had severe rheumatoid arthritis, or very poor eyesight, or some other major physical problem, you might find it difficult to care for your finger and toenails.

        And when you get to pensioner age, sadly you may very well find yourself alone during your most vulnerable years (and that’s not counting those who never had a partner).

        It might help if you occasionally thought outside your own bubble.

        • jerry
          Posted July 8, 2020 at 7:36 am | Permalink

          @SM; Indeed, even though your last sentence was a bit rich coming from you, even aimed at Mr Life.

          Some people do need to start thinking of others, such on mask wearing, do they realise that many hard of hearing people (consciously or sub-consciously) rely on lip-reading to help them understand what they are hearing – this is why it is impossible to teach a young child to talk via cartoons, and why childrens’s TV is now often does more damaging to a child than good.

          If the virus is so wide spread, or it has become airborne, then masks will not stop transmission either way, we would likely need a very economically damaging Spanish style lock-down, or simply accept a death rate that would ,make that of the USA and Brazil combined look small.

    • a-tracy
      Posted July 7, 2020 at 8:56 am | Permalink

      Ian Nail technicians can work (since 4 July), they just need gloves and screens that cost around £90 or more.

      I think the government should explain the medical advice regarding the continued closure of gyms if the gym equipment is fully sterilised between users what is causing the continued lockdown.

      • jerry
        Posted July 7, 2020 at 8:00 pm | Permalink

        @a-tracy; “the government should explain the medical advice regarding the continued closure of gyms”

        Do the majority of people really need it explained why breathing hard from physical exertions, and indeed signing and shouting, are not good when it comes to contagion from aerosolled spittle, and in the case of gyms, other body fluids.

        Yes a gym could be sterilised between users, that would be a single user with no personal trainer present, not only is that not the business model of most gyms, I suspect, but the whole gym would likely need to be deep cleaned to sterilise it between each and every single use!

        • a-tracy
          Posted July 8, 2020 at 8:06 am | Permalink

          There are plenty of people jogging past walkers throughout the lockdown heavy breathing too close to people in fact some of them revelled in this and looked at walkers as though they shouldn’t be out, they wore no masks why wasn’t this jogging banned on pavements other than in wide open spaces if aerosol spread is the reason gyms can’t open. Cyclists heavily breathing next to people, some cycling on the pavements why wasn’t this banned we came into much more risk from their spittle and breathing hard than anything at work if that’s what you’ve read medical opinion is on this matter.

          For a lot of people to be constantly moaning about re-opening gyms Jerry I’d say yes they do need it explaining. Not everyone has a personal trainer when they go for a workout, staggered opening hours with a maximum number of clients allowed in with a 4m physical distance – maybe some gyms could accommodate that, most personal trainers seem to be online home workouts and taking their clients outside and organising work-outs in parks at large distances.

          • jerry
            Posted July 9, 2020 at 3:31 pm | Permalink

            @a-tracy’; “yes they do need it explaining”

            Yet the govt has done nothing else for the last 16 weeks but try and explain, the problem [1] is some either just can’t understand or (perhaps more likely) do not want to understand.

            I take your point about joggers and cyclists, I think I made much the same point when the lifting of the lock-down was announced and the govt were suggesting cycling to work is safer than using Public Transport, as it is, but at the same time were trying to dissuade people from using their personal cars (to the point of using the daily graphs to bemoan increased car use). But the difference between all that and gym’s is the latter are generally inside – perhaps open air gyms might be an answer?

            Having said that though, whilst the problem of shared sessions might be mitigated by correctly spaced outdoor gym’s they would do nothing to solve the problem of shared equipment that will still need to be sanitised between users.

            [1] not helped by those who deign Covid-19 as a real danger, and I suspect that there are a lot of young, fit, healthy, gym users in that category, after all we all know CV19 only affect the grossly unhealthy and old…

    • jerry
      Posted July 7, 2020 at 12:04 pm | Permalink

      @Ian Wragg; “You can have your hair cut but not your nails.”

      Wrong, those who need the services of chiropodists have been able to get their nails cut and other procedures, for about a months now.

      • Ian Wragg
        Posted July 7, 2020 at 3:58 pm | Permalink

        Funny how the nail bars and beauty salons are still shut and you can find it on the government website.
        Schools of motoring are back in business with both parties wearing masks.
        Its very inconsistent.

        • jerry
          Posted July 8, 2020 at 6:23 am | Permalink

          @Ian Wragg; Try actually reading what I said, not what you think I said. People who need to use the services of a chiropodists have been able to for about a month now – and even then those who had a medical emergency could no doubt access said chiropodist though out the lock-down.

        • jerry
          Posted July 8, 2020 at 5:43 pm | Permalink

          @Ian Wragg; “Its very inconsistent.”

          It’s not inconsistent at all, assuming one actually attempts to understand the issues, rather than just choosing to have a rant.

          How many driving instructors sit face to face with their customers as (so called) Nail technicians do (remember masks do not stop contagion, they low the risk), and how many driving instructors become intimate with their customers like some beauty salons do – if they did they would not be driving instructors for very much long, and they would be taking an enforced break from general society at a HMP facility!

  14. Mike Stallard
    Posted July 7, 2020 at 6:26 am | Permalink

    We have just lived through a revolution. Many people are now working from home, or popping into the (expensive) office for a chat or a meeting. People are using their cars less out here in the Fens.We are quieter, less frenzied, more relaxed.
    Meanwhile, the immigrant labour still pounds on, mostly un-unionised (they did try and then gave up). We are certainly (Leicester) a society that depends on almost slave workers).
    To be honest, I am not at all sure how this is going to affect the economy.

    • MWB
      Posted July 7, 2020 at 10:10 am | Permalink

      But we were told that we would be enriched by immigrant labour.

  15. Narrow Shoulders
    Posted July 7, 2020 at 6:49 am | Permalink

    In your analysis you have not accounted for the fear factor.

    The population is running scared of catching this disease and have grown accustomed to being imprisoned at home. Many will not emerge until assured by government and media alike that it is safe.

    Government and media created this, government and media now need to put it back in its box and encourage us to go back to the way it was before.

    • Ian Wragg
      Posted July 7, 2020 at 4:00 pm | Permalink

      I think there’s an element of idleness as well. Having a naff job and drawing 80% of salary with no commuting or child care costs. What’s not to like.

      • Narrow Shoulders
        Posted July 8, 2020 at 7:30 am | Permalink

        There is the danger that furlough will go from being a temporary support system to a lifestyle, agreed.

        Labour is already calling for the scheme to be extended. The economy is reopening, if those jobs aren’t being done then they will not be needed in the future. The October cut off is generous but correct at the moment, there should be no further extensions.

        IK would go further to say that for any role that is made redundant without returning to work, the employer should repay the furlough on that role (BA take note)

  16. Narrow Shoulders
    Posted July 7, 2020 at 6:50 am | Permalink

    I see no mention of public transport in your analysis Sir John.

    Until we can get on a bus or train without restriction, there will be no full recovery

    • Mark B
      Posted July 7, 2020 at 3:42 pm | Permalink

      Agreed.

  17. Nigl
    Posted July 7, 2020 at 6:53 am | Permalink

    Talking of the economy, I see you are intent on trashing it further by giving up our world lead in 5G and compromising 4G not to mention costing the telecoms industry up to £2billion and, of course something never mentioned, partly paid for by the knock on, on pension funds and people’s incomes via dividends.

    And for what? The very dubious claim that Huawei is a threat to our security. Voda/BT and the NSC have been all over that technology and have found nothing ‘hidden’ that could be in any way a threat.

    You are also putting Hsbc and Standard Chartered in an impossible position. They are world trade banks and we need their links and expertise to China plus the rest of the Far East. Again a key component of our pension funds and dividend income. They also pay large amounts of tax, corporation, on their dividends and employees. Again our economy is deep in the mire and Raab is virtue signalling a fight we cannot win.

    China’s index went up yesterday and the world followed.

    Pathetic sabre rattling by your MPs . If you want to get the economy back you have to join the grown ups and be more pragmatic. Apparently we are all going to get vouchers to spend. I haven’t played Monopoly for some time.

  18. Annette
    Posted July 7, 2020 at 6:55 am | Permalink

    Like many people, I simply cannot be bothered with playing the game/experiment of ‘let’s see what tyrannical powers we can impose on people’ in this mad game of ‘Simple Simon Says’, which is even worse at local Council level. ‘Guidance’ is being conflated with ‘law’ at all levels. Even Ministers are doing it. That is tyranny.
    For something that has a survival rate of 99.96, & mainly impacts, unlike flu, those 70+. It has nothing to do with ‘safety’, but everything to do with control.
    So no, I will not be returning to the High Street until sanity returns, & I am not willing to damage my health & immune system by wearing a mask, which is as effective as expecting your pants to stop a fart.
    Those companies silly enough to support the politics of ‘end capitalism’ & other marxist ideologies, will hopefully get their wish come true- for them at least, as I’ve sourced replacements for their goods.
    There was no need to shut down the economy, & I don’t see anyone in Govt willing to relinquish their tyrannical powers any time soon. It does not bode well.

    • Lynn Atkinson
      Posted July 7, 2020 at 2:15 pm | Permalink

      +1

    • Mark B
      Posted July 7, 2020 at 3:44 pm | Permalink

      Well said, Annette. People walking around with face tampons thinking that will save them. Fools.

      • Martin in Cardiff
        Posted July 8, 2020 at 6:02 pm | Permalink

        No, they are thinking that it may well save others, and they are right, as many, more civic countries have now shown.

        Not everyone is like you, remember.

  19. GilesB
    Posted July 7, 2020 at 6:57 am | Permalink

    V shaped recovery implies that the output and incomes we lost in the three months of downturn will be replaced in the following three months.

    That output and income is gone. It is not coming back. What we want is the rate of output and income to return to their previous level.

    It took fifty years to repay borrowings for the second World War.

    The Government should be issuing thirty year bonds to fund the costs so far of furlough etc, plus the ‘build, build, build’ recovery plan.

    The bonds should carry a positive, inflation-linked coupon, in order to dissuade future governments from letting inflation out of hand.

    • Ian Wragg
      Posted July 7, 2020 at 4:03 pm | Permalink

      they could issue bonds for infrastructure projects availjable only to joe public like during privatisation. They would be very pop.

  20. Nigl
    Posted July 7, 2020 at 7:11 am | Permalink

    Ps all over the papers today a report smearing Huawei, no facts just intimation. Obviously part of HMGs justification campaign. A trade war with China. Just what we need. It doesn’t matter to them, they have total control over their population.

    They are ‘nasty’ but the consequences to us our nastier. Will someone truly think this thing through from end to end rather than the current knee jerking.

    • Original Richard
      Posted July 7, 2020 at 8:25 pm | Permalink

      “Ps all over the papers today a report smearing Huawei, no facts just intimation.”

      It is sufficient that a number of Chinese laws state that Chinese individuals and organisations must, if asked, co-operate with intelligence work.

      I simply cannot understand how Baron Browne (ex CEO of BP), Sir Michael Rake (former BT chairman), Sir Andrew Cahn (former senior civil servant) and others can be allowed to work for Huawei UK and hence be working for the Chinese government – a country hostile to our democracy and very existence.

  21. George Brooks.
    Posted July 7, 2020 at 7:14 am | Permalink

    One hopes he is going to be more right than wrong but it is going to be a funny shaped V.

    The drop into recession was vertical but the return to where we were is likely to be no more than at 45 degrees as so much depends on travel, accommodation, entertainment and the arts. These very large sectors will take quite a while to recover and do little more than break even during the next 12 months or so especially while social distancing is with us

  22. Michael
    Posted July 7, 2020 at 7:15 am | Permalink

    Andy Haldane is delusional. Even the Bank of England said a while ago we were heading for the worst recession in 300 years. What we are going to get is the greatest depression with deflation is many areas of the economy and massive inflation in others. This absurd and unjustified lockdown has done at least as much damage economically as WW2. The damage will last for decades and has altered the world permanently. Quite a legacy for a party that styles itself a supporter of freedom and business. I think Boris regards himself as a latter day Churchill. Well I’d agree. Winston lost us the empire, Boris has mortally wounded what’s left.

  23. Bryan Williams
    Posted July 7, 2020 at 7:22 am | Permalink

    I’m not sure there is a letter to describe the fall and recovery of this current situation. I’m thinking it will have a similarity to the mirror image of the COVID death rate graph – I’m not sure a politician or economist should make that comparison though!

  24. Anonymous
    Posted July 7, 2020 at 7:34 am | Permalink

    Social distancing is the killer. The fact is we have a service biased economy and it cannot possibly recover with social distancing in place.

    We no longer need 250,000 people a year arriving now that we have mass unemployment likely.

  25. Sir Joe Soap
    Posted July 7, 2020 at 7:40 am | Permalink

    I’d call a stuttering recovery, not anything like pure V shaped.
    Many examples of people working under the wire, as in Leicester. How these are recorded will determine how this plays out. There’s a lot of money out there ready to be spent, and the question is not only when, but where and on what?

  26. Lesley
    Posted July 7, 2020 at 7:52 am | Permalink

    The phrase ‘dead cat bounce’ comes to mind.

  27. majorfrustration
    Posted July 7, 2020 at 7:53 am | Permalink

    but have we saved the NHS yet? Envy of the world.

    • Lynn Atkinson
      Posted July 7, 2020 at 2:20 pm | Permalink

      😂😂so long as no patients turn up it will never fail. It has te world entranced all right. Foreign Doctors in my family come to work here a few months a year to top up their income. They say keeping a straight face is the hardest part. Some procedures done in a morning in SA (The patients have to get back to work) take 3 weeks here.

    • Fred H
      Posted July 8, 2020 at 6:00 am | Permalink

      Near neighbour 87 with bad COPD and unwell for a couple of weeks was prescribed an antibiotic. After a week little change. I gave him our pulse/oxygen monitor. He reported results after a day or two to Doctor. Asked to come in. Not well enough to drive, where to park and walk to surgery? Later a call back to go to RBH – it was serious enough to need investigating. Same thing how to get there – I cannot share my car with him, even gloved and masked!
      Finally a call back to say hospital transport will collect him… in 2 days time, who and how?

  28. Adam
    Posted July 7, 2020 at 7:55 am | Permalink

    Hairdressers doing 2-inch haircuts instead of the two 1-inch cuts they would have done, do not regain their length of loss.

    Consumer needs change. Once we needed a pile of paper delivered just to read yesterday’s news. Today, Pret a Manger are cutting, because folk working at home don’t need to Take to Eat where they don’t work.

    There is probably enough latent demand to replace & even exceed what has been lost. Replacing what was, as it then was, may deal with some of it. Those offering solutions best-suited to consumers’ new circumstances will gain most from the difference.

  29. Ian Wilson
    Posted July 7, 2020 at 7:56 am | Permalink

    I hear on the radio this morning that I may be offered £5,000 to insulate my home. It is hard to imagine a crazier way to stimulate the economy.
    My home energy costs are £1.100 pa. More insulation will save ZERO on cooking, fridges, lighting or TV. That leaves perhaps £100 saving at best on heating – 50 year payback! Oh, and ZERO impact on world climate which is minimally influenced, if at all, by CO2.

    • a-tracy
      Posted July 7, 2020 at 10:13 pm | Permalink

      True

  30. Anonymous
    Posted July 7, 2020 at 8:01 am | Permalink

    https://www.dailymail.co.uk/debate/article-8495961/RICHARD-LITTLEJOHN-Theres-normal-new-normal.html

    I don’t know anyone out here who isn’t saying WTF ??? As regards the inconsistency of it all.

    • a-tracy
      Posted July 7, 2020 at 10:20 pm | Permalink

      👍🏻 So true, it’s getting ridiculous.

  31. Iago
    Posted July 7, 2020 at 8:19 am | Permalink

    Andy?

  32. BOF
    Posted July 7, 2020 at 9:04 am | Permalink

    Our local Council has furloughed a large number of its staff, at least 50% I am told, but they still seem able to operate so it must be the case that they are grossly overstaffed and also the reason they are permanently broke.

    I think we can be confident that the same applies to the majority of Councils as well as Government so take a scythe to the public sector which creates no wealth. At the same time deregulate, cut taxes, simplify the tax code. Set the entrepreneurs free to do what they do best.

    • Dave Andrews
      Posted July 7, 2020 at 3:42 pm | Permalink

      The reason they still appear to operate is, because if you look at where council spends, virtually nothing is for your benefit. They empty the bins and tidy public places, but that consumes a tiny portion of their budget. They also spend on education, which personally I’m comfortable with. Just about all the rest goes on “adult services”, but don’t blame them as this is a statutory requirement.

  33. William Long
    Posted July 7, 2020 at 9:12 am | Permalink

    It looks to me as if Mr Haldane is singing from the same hymn sheet as an economic commentator, Roger Martin-Fagg, who produced an update for the executive mentoring organisation, Vistage, in June. He based his hope of a ‘V’ recovery mainly on the amount of money in the system. By itself though, that seems to me more likely to produce inflation rather than productive recovery. To spend the available money productively people need to be confident that Covid19 is beaten, at best with a vaccine or at least with a viable cure, otherwise they will simply keep the money in their pockets against renewed disaster. Businesses, and business owners need to be confident that investing is worth their while and they will be allowed to keep much of their profits otherwhise they will not invest. The Government needs to be clear that extra taxation will be counterproductive in this respect.
    Meanwhile the ‘Opposition’ elite comes forth with its usual muddle of mixed messages: on the one hand they do not want ‘Austerity’; on the other they are crying for a Wealth Tax.

  34. BOF
    Posted July 7, 2020 at 9:14 am | Permalink

    Slightly OT. The PM this morning reported as criticising the Care Homes. Of course he did. The blame game has started and having built the appalling NHS into a deity, he has put it beyond criticism, it would be like the Pope criticising Christ.

    Total reform of OUR NHS to include much private provision would ease the burden on the taxpayer and give us all a much better healthcare sector.

  35. The Prangwizard
    Posted July 7, 2020 at 9:15 am | Permalink

    At the moment I can’t see anything like a proper V overall. The shape from recovery bottom may have that sharp point but the right hand side has only got a short way up. The rest will be a long shallow incline. It will vary industry to industry of course. As is said, for any big business which has lost 50% the idea of an immediate increase of 100% is hard to see.

  36. ukretired123
    Posted July 7, 2020 at 9:15 am | Permalink

    The most important “Advantage in the Disadvantage” silver lining from this Pandemic upheaval has forced everyone to rethink their modus operandi and prepare for change. It is both a virtue and a curse that the old way of “Don’t fix it until it’s broke” persists when preventive change is looming.

    Serendipity, where something or someone will come to solve a problem when you most need it is now required for everyone. At times of dire straits in the past Britain has been exceptional on the innovation front in so many areas. Let’s hope this encourages us all to become more flexible because “Change is the new modus operandi” and by default folk hate change.

    Those who adapt will prosper. My generation have experienced the most rapid change in world history yet there are many who cannot cope and need help. Joining the EEC was an attempt to alleviate some of the adverse effects but it became a millstone / straitjacket instead…

    • Lynn Atkinson
      Posted July 7, 2020 at 2:25 pm | Permalink

      Joining the Common Market was the biggest change of all. It reversed the result of 2 World Wars. We gave up our country, democracy (where you can sack your lawmakers) and capitalism (we have international Corporatism which is brutal).
      Enoch warned you!

  37. Caterpillar
    Posted July 7, 2020 at 9:17 am | Permalink

    I doubt there will be a V shaped recovery, but I guess G will contribute some.

    Reasons for not recovering would be international environment, uncertainty due to threat as a business or locality of being shutdown again, immobility of labour caused by the on going and prejudiced furlough scheme.

    There are dumb market and society distorting things that I fear, but will have to wait to judge Mr Sunak’s statement. I fear a temporary stamp duty change to keep house prices mispriced and its effect when removed (either any change has to be permanent or don’t do it. I still disagree with extra stamp duty on second property due to mobility arguments, though not on third); if there is a stamp duty change it needs to be permanent. Any green grants for residential property should not be related to wealth or income of owners, or whether owner occupied or rented. It should simply be based on age and EPC rating of property (G, F, E – I don’t know how many of each type there are in existence) and whether it has/will have on going occupation. Aid to employers should not be aged bias, if grants are made for direct/indirect training they should be available to all not just young employees. VAT should not be temporarily reduced (or politicised by varying ratings), it should be significantly increased and the additional revenue raised redistributed uniformly to all – this will act as a progressive consumption tax shifting some buying power and the ability to consume to those who currently don’t have it. The income threshold for immigration needs to be increased, and immigration needs to be much reduced, even negative – it is GDP per capita that people feel in their lives, so I fear a rush to recover GDP may entail a continued low income model.

    I do not see Hancock reducing uncertainy. I do not see Patel severely limiting immigration until GDP per capita (hence quality of life and life expectancy) is markedly increasing. I certainly do not see Sunak being ethically equitable, signalling for future saving (individual responsibility), oh etc., I just cannot fathom his behaviour or people’s support for it.

    V-shaped recovery, probably not, but if it does happen it will be coming with large societal overhangs.

    (The PM probably needs a better Cabinet).

  38. Lifelogic
    Posted July 7, 2020 at 9:24 am | Permalink

    So Sunak is going to give people a voucher of up to £5,000 to inuslate their homes.

    The scheme will doubtless work like this:- they tax people for £5000, then they waste perhaps 20% or so on the admin of this taxation, then they waste another 20% on the admin and distribution of the vouchers, then you get a voucher back that you can only spend on certain things (probably ones that are not you priority) and only with certain approved (so usually over expensive) suppliers. Plus you have to wade through endless forms and hoops to get it.

    Of course some people might need a gutter repair or a new roof or a car repair so they can get to work, but no they have to insulation or similar.

    If this is not clear proof that Sunak (and this government) is economically illiterate then what is? Just leave the money with the people and cut out all the parasites in the middle you plonkers.

    • Lifelogic
      Posted July 7, 2020 at 11:01 am | Permalink

      The Treasury said that it hoped its green jobs package would help create tens of thousands of jobs “as part of a drive to power up the nation’s workforce and protect the environment.”

      More economic illiterates – it will clearly be a net job destroyer.

    • Ed M
      Posted July 8, 2020 at 8:57 pm | Permalink

      @Lifelogic,

      No one has a perfect economic plan to help kick-start our economy. The effect of the coronavirus on our country and economy is unique.

      Overall, I think Sunak is doing a great, although imperfect, job.

      I’d give him 9/10 so far.

  39. formula57
    Posted July 7, 2020 at 9:41 am | Permalink

    There is enough bad news about at home and internationally to suggest Mr. Haldane is too optimistic.

    My own (pre-Covid) plans were for a frugal year and with now heightened prospects of diminished investment returns and possible extra future tax take, I am not expecting to join in boosting demand.

  40. Cliff. Wokingham
    Posted July 7, 2020 at 9:54 am | Permalink

    In order for a real recovery, we need our Chancellor to stop throwing money about like a drunk sailor on shore leave.
    I believe the media is using the virus crisis to push our so called Conservative Party in to acting like socialists. The country has rejected socialism time after time so why force it on us?

  41. Everhopeful
    Posted July 7, 2020 at 10:04 am | Permalink

    Lightbulb moment?
    Cut stamp duty with immediate effect and it will help the economy immediately!!

  42. agricola
    Posted July 7, 2020 at 10:17 am | Permalink

    Mr Haldane may have a good point. I remember that when we were reduced to three day working we managed to produce as much as we had done in five. To absorb a rapid rate of production while climbing out of that “V” we need customers. The customers will in large part need to be new ones because I do not see the EU enjoying the same “V” recovery. We will also need to produce more of our own needs in house, specifically re food. Government can play its part by getting behind all this entrepreneurial endeavour. It will be a time when we discover who our real friends are.

    • Lynn Atkinson
      Posted July 7, 2020 at 2:28 pm | Permalink

      +1 we need our customers (British people) to have money in their pockets. Cut their taxes in the name of all that is good!

    • Caterpillar
      Posted July 7, 2020 at 8:34 pm | Permalink

      The three day week certainly warns of not having a reliable, autonomous energy/electricity supply.

      In the early 1970s in the UK the service sector accounted for about 55% of GVA, it is now over 80%. Production employed about 8 or 9 million workers, it is now about 3 million workers i.e. an even larger drop than from 5 to 3 days a week (there has been a 12 million increase in UK pop’n in the same time frame). Agricultural employment has dropped from about 0.7 million to 0.4 million – incredibly important though this sector is, it is not labour intensive.

      We are in an exaggerated early-70s, there has been a huge (self-inflicted) supply side shock and attached to this is that – what is needed to be supplied can be by less labour. There are two possible routes – a move towards autarky and a national dividend (monetary not fiscal UBI) or maintaining free global trade and China (and others) consuming more and U.K. (and others) both saving and investing more. In either case U.K. economy needs to adjust, and apart from the ‘let’s create green demand’ response I don’t see much realisation of the mid to longterm seriousness of the situation. (O.K. infrastructure is good and needed, but will only help for so long).

      On the positive side, there is much the U.K. could supply to itself, where much of the resource is labour (and hence essentially free, if labour is available the cost is leisure given up) – late life care, rubbish collection, more policing etc., these are things that make people’s lives better. Nonetheless this is again a shift of how to organise the economy, where real resource constraints are hierarchically superior to financial resource constraints – at the moment the economy is organized like the derivative (finance) takes precedent over the stock (real resources) – there are too many vested interests in the world for this (and the parallel political changes) to happen.

  43. zorro
    Posted July 7, 2020 at 10:34 am | Permalink

    Indeed, some very bizarre forecasting from the BoE. How on God’s earth they can see a V-shaped recovery is beyond me bearing in mind the government enforced calamitous trading conditions on the service economy. I suspect that it is very unconvincing mood music. Crawling out of this disaster it is clear that they are hoping to push a vaccine on the population to justify this quasi ‘lockdown’ exit. Until Johnson apologises for his stupidity, this country will be cursed.

    zorro

  44. Ed Hirst
    Posted July 7, 2020 at 11:05 am | Permalink

    There is not much cause for optimism as far as I can see. In my locality many previously furloughed people are now being made redundant. The much vaunted opening of pubs has been a damp squib because of the restrictions with which it is hedged about – all the spontaneity has gone. It is still extremely difficult to buy building materials such as timber, so no home improvement projects. And what on earth is the point of buying a new car? Cars were the symbol of personal freedom and mobility, which has now gone. I am amazed the markets have recovered as much as they have, but the FTSE is noticeably lagging behind other major indices.

  45. Lifelogic
    Posted July 7, 2020 at 11:06 am | Permalink

    More good new the weekly deaths reported today are again below the five year average in the last week reported (by about 3%) take off those death down as being Covid related then perhaps as much as 13% down! This despite the NHS partial shutdown.

    A very safe time indeed to be alive it seems – get everyone back to work.

    • Lynn Atkinson
      Posted July 7, 2020 at 2:30 pm | Permalink

      May as well shut the NHS down completely. It kills more people annually than the Army (ie they die of something they did not have when they went to hospital). £66 million insurance payouts annually from the delinquent NHS.

  46. ian
    Posted July 7, 2020 at 12:30 pm | Permalink

    I’m forever blowing bubbles, pretty bubbles in the air, they so high, nearly reach the sky, then like my dreams they fade and die. Fortune’s always hiding, I’ve looked everywhere, I’m forever blowing bubbles, pretty bubbles in the air.
    I’m dreaming dreams, I’m scheming schemes, I’m building castles high.

    The outcome of what has happened, will not be known until June next year, it looks to me that the Titanic markets have been hole below the waterline, but the music is still playing and the people are still dancing.

  47. RichardP
    Posted July 7, 2020 at 12:44 pm | Permalink

    Apart from buying the essentials I won’t be returning to the shops until the OLD normal is reinstated. I don’t like queuing, I don’t think wearing a face nappy is healthy or safe and I have no intention of having to leave my contact details by going for a coffee and running the risk of appearing on the Government’s track and trace radar.

    As for the proposed home insulation vouchers, they won’t lead to a tsunami of cold calls from cowboy traders will they!

    • matthu
      Posted July 7, 2020 at 9:15 pm | Permalink

      +
      Today we have all the celebrity / Hollywood lefties telling us that wearing a face mask should become a civic duty like wearing a seat belt. Wearing a face mask should be considered the new normal. And all the TV stations giving them free publicity with no challenge whatsoever!

      I will not wear a face mask out of a sense of civic duty. Do the maths.

  48. Martin
    Posted July 7, 2020 at 12:46 pm | Permalink

    I think this V shaped recovery is hopelessly optimistic.

    The virus isn’t going away and what is called the “hospitality” and travel industries are taking a big hit. A glance at the airline industry’s long term cuts says it all.

    On the plus side online working is growing. So we need more fibre to the home and people to install it and less bar staff etc. This structural change has to be facilitated by government where possible.

  49. Original Chris
    Posted July 7, 2020 at 1:14 pm | Permalink

    Why has the government moved the goal posts? Ostensibly lockdown was to save the NHS. What are the reasons for continuing lockdown for some businesses/industries? How on earth can they recover? Many, of course, will not.

    The partial lockdown we are in, with masks and social distancing, is causing great concerns for businesses like pubs and restaurants. We went at the weekend for a meal, and because of the distancing they basically could only take very few customers for drinks/meals, yet they still had to employ chef, barman, and people to wait on tables. How can they make money from that? The landlady was not her usual cheery self. She was one very worried person.

    Our dentist who runs a private practice has just opened up again, but is seeing very few patients compared with before, and there are added expenses in terms of extra purchases/precautions e.g. PPE.

    If he does any actual treatment, the treatment room has apparently to be left empty for an hour before he can see another patient which of course greatly reduces the numbers that he can see. (The logic for this requirement is apparently based on some lab experiment/trial which was conducted under conditions of 40 degrees C, hardly the dental surgery environment. What stupidity framing regulations on this basis. Meanwhile, he still has to employ staff for the actual running of the surgery, so another business that has supposedly come out of lockdown, but is required to operate at a loss, on top of losses sustained from the business being closed from March till 4 July.

    This is a nonsense, Sir John, and Boris yet again has made a catastrophic misjudgement for business. He really seems to have no business acumen at all, nor awareness of the very grave situation he has put this country in. It is not the “fault” of the virus, but instead the reaction to it. The catastrophe we now find ourselves in is man made.

    • Original Chris
      Posted July 7, 2020 at 1:36 pm | Permalink

      I meant to add to my comment above, that our dentist believes that between 25% and 30% of dentists will go out of business as a result of the lockdown policy.

  50. Anonymous
    Posted July 7, 2020 at 1:15 pm | Permalink

    Loft insulation… YAY !

    (Better be sure this £2bn doesn’t end up getting wasted on the high street.)

  51. Turboterrier
    Posted July 7, 2020 at 1:46 pm | Permalink

    No chance. When the greenies start their attack on the whole of the British population.

    The green lobbyists and campaigners making up the self-described “Zero Carbon Commission” are proposing the immediate introduction of carbon taxation in key sectors of the economy, several of which have not previously been deeply affected by climate policies.

    The GWPF have reacted strongly against such madness.

    https://www.thegwpf.com/boris-warned-that-tone-deaf-carbon-taxes-risk-poll-tax-fiasco/

    the Zero Carbon Commission is not an official body but it has quite big hitters for the green dream on board.

    http://www.publicfirst.co.uk/new-report-for-the-zeroc-commission.html

    • Original Chris
      Posted July 7, 2020 at 6:53 pm | Permalink

      I think this is the cancer at the heart of Boris Johnson’s “progressive” approach. It reveals how he seems intent on slowly but surely destroying this country, littering the path to destruction with his classical “witticisms” which actually no longer amuse or fool people. I think Boris’s true persona has been laid bare. It is ugly, in my view.

    • Mark B
      Posted July 8, 2020 at 5:00 am | Permalink

      Well done Turboterrier.

      Once again we see the Lefty Liberal rich prey on the poor. Typical Socialism. Say one thing, do another.

  52. Freeborn John
    Posted July 7, 2020 at 2:18 pm | Permalink

    The U.K. must not give the EU 25 years of fishing rights. Any free trade agreement That only covers goods and food is already too generous. We don’t need to sweeten one-sided deals further with 25-years of fish too. Better to trade in WTO terms for a few years and then have them come begging for an FTA when their exporters tire of paying tariffs on their trade surplus.

  53. ian
    Posted July 7, 2020 at 5:10 pm | Permalink

    The only thing I am watching is the banking sector along with trading accounts, at the moment you can borrow1 million pounds from your trading account for less than 1.75% and lower the more you borrow, and as for the chancellor and his stamp duty holiday, it’s great if you have cash and can buy at a discount or are already known to banks as a good risk otherwise you will need a big deposit.

    Banks are not interested in lending money they are only interested in complying with regulation and capital requirements set by the regulators and gov, besides there no money in it for them.
    The gov has to guarantee everything before the banks will lend, Why because the banks are all basket cases.

  54. David Brown
    Posted July 7, 2020 at 5:15 pm | Permalink

    It is my belief that Britain like many countries will have a very different business model after Covid 19. Changes include – On line business and sales, home working, remote (internet) higher education, click and collect (meals and drinks) pubs. Reduced long haul flights, on line car sales. All the evidence suggests short haul flights to popular Med destinations etc will strongly bounce back.
    I’m in favour of reduced costs to business, yet I’m in favour of an asset wealth tax on individuals.
    I’m in favour of research into Hydrogen engines for aircraft.
    I agree end of 2020 will be lower than the start, its 2021 that’s interesting assuming no big scale lock down due to a second spike!!!

  55. acorn
    Posted July 7, 2020 at 5:17 pm | Permalink

    The following is an abstract from comment I have made on an academic site elsewhere. If you have a basic understanding of MMT, you won’t need an MBA to understand what I am getting at.

    Do we need to worry about a wall of new money, suddenly falling onto the private sector, as the virus lock-down subsides, spiking up inflation?

    As far as I can gather, the UK Treasury has fiscally injected circa an extra 150 billion of its “units of account” so far since last February, where are these “units of account” currently hiding out?

    Hence, what is there velocity of circulation in the economy; are they getting taxed every time they change hands so the Chancellor gets his money back?

    Are households paying down credit / loans with them; are they being voluntarily saved (households frightened for the future); are they being involuntarily saved (can’t get out the house to spend them)?

    • a-tracy
      Posted July 8, 2020 at 7:39 am | Permalink

      I think you’ll find a lot went to on-line retailers, particularly Amazon who have had a very good delivery service throughout, and from what I’ve seen locally garages and Booze shops that have been selling boxes and boxes of cheap ale.

      • a-tracy
        Posted July 8, 2020 at 7:40 am | Permalink

        Oh and wine shops, the recycling bins are full of empty bottles.

  56. Passingby
    Posted July 7, 2020 at 5:21 pm | Permalink

    You’ve said it in the last part “full recovery will take longer” but i think probably never. All talk about a V shaped recovery is misplaced- instead of V shaped we should be contemplating L Shaped and plan from there

  57. Martin C
    Posted July 7, 2020 at 5:39 pm | Permalink

    Like most complementary therapists I work from home and see people on a one to one basis. I leave ample spaces in between clients to ensure the highest standards, yet, it appears the government has conjoined me with Spas where multiple clients gather to see multiple therapists and where there is a far higher chance of cross infection.

    Please, Sir John, ask the government to consider letting individual therapists practice privately again. With contact details of their clients, when and where they were seen, and adequate PPE they could provide the government and spas with the essential information that could lead to the eventual reopening of this important sector.

  58. Everhopeful
    Posted July 7, 2020 at 6:48 pm | Permalink

    Well done Ben Bradley!!
    May others follow.

  59. Martin in Cardiff
    Posted July 7, 2020 at 7:37 pm | Permalink

    Any shaped recovery hinges on pretty well the entire population having the confidence to resume normal economic activity, which mirrors closely normal social life.

    That won’t happen until the epidemic is stamped out.

    You might get oh, seventeen million or so to behave recklessly, whether it has or not, but what about the other three quarters of the people?

    Life is pretty well back to normal in Vietnam, China, South Korea, Taiwan, Australia, New Zealand, much of the eastern European Union and in plenty more places on the other hand.

    Nor did they have scores of thousands of dead with people still dying in large numbers.

    • Fred H
      Posted July 8, 2020 at 5:45 am | Permalink

      Australia outbreak so bad in Melbourne, they closed the Victoria – NSW border!
      Life in NZ rarely moves on from 100 years ago elsewhere!
      Another big scare in China from the ‘virus’.
      What tourist traffic is able to move around the Eastern EU?
      Fullmarks for you inventing as usual.

      • Martin in Cardiff
        Posted July 8, 2020 at 6:08 pm | Permalink

        They all take their flare-ups very seriously, but they are orders of magnitude smaller than the UK’s daily tally.

  60. Fred H
    Posted July 7, 2020 at 8:10 pm | Permalink

    Has China threatened a trade fall should be kick HUAWEI into the long grass?
    WONDERFUL. Great if they take the initiative rather than us having to tell them to go eat bat soup!

  61. a-tracy
    Posted July 7, 2020 at 10:27 pm | Permalink

    John, you must have your head in your hands, please tell us you have, insulation at £5000 what’s this game, it’s getting unbelievable, who benefits from it, surely if we’ve bought homes in the last thirty years they’ve all got insulation we were told ours did.

    Boris needs to sort out his new care crisis tomorrow, those staff who stayed away from their own families to help look after other people’s elderly relatives. The 120 resident care home private manageress in the newspaper with no losses because she had the foresight to buy specialist masks for £20 each and gel early and give clear instructions to her staff needs lauding not blame shaming.

    • Lifelogic
      Posted July 9, 2020 at 9:24 am | Permalink

      Here is a voucher for £5K of insulation mate (but you will have to pay £8000 more in tax for it after government “costs” of collection and distribution). Great thanks, can I use it to fix my leaking flat roof and that gutter? No mate you have to spend it on insulation and green crap and only at these approved (and therefore overpriced) suppliers!

      Great mate thanks for nothing – just what I needed 8000 more tax and a useless voucher. Essentially a chocolate teapot – worse as you can at least eat chocolate.

  62. Lindsay McDougall
    Posted July 7, 2020 at 11:47 pm | Permalink

    There may be a V shaped recovery but the slope on the recovery part of the V is likely to be shallower than the downward slope going into the recession, if only because of the inhibiting effect of accumulated debt, both public and private. And we should not imagine that a great big public expenditure splurge will be beneficial.

    • Lifelogic
      Posted July 9, 2020 at 9:18 am | Permalink

      +1. The last thing we need is government spending money as they waste at least 50% of it – on lunacies such as HS2, encouraging people not to work, renewables……

  63. a-tracy
    Posted July 10, 2020 at 12:59 pm | Permalink

    Please John, please demand Matt Hancock tells us what is causing the R rate increases in Leicester, Blackburn, Peterborough and Bedford – no lies, no obfuscation, who is spreading this, what jobs are they doing, which specific postcodes, are they imported cases caused by people travelling here. TELL US so that we can protect ourselves because the government isn’t.

    This is not acceptable. The government is putting areas of England at grave risk, Sturgeon’s SNP is lauded for getting on top of this virus in Scotland, we elected a majority Tory government in England and we expect you to deliver and give us clear information today.

    • hefner
      Posted July 15, 2020 at 12:14 pm | Permalink

      a-tracy, what a dreamer you are, ‘we the people’ expect you to deliver and give us clear information.
      At least one thing is sure: you made my day!

  • About John Redwood


    John Redwood won a free place at Kent College, Canterbury, and graduated from Magdalen College Oxford. He is a Distinguished fellow of All Souls, Oxford. A businessman by background, he has set up an investment management business, was both executive and non executive chairman of a quoted industrial PLC, and chaired a manufacturing company with factories in Birmingham, Chicago, India and China. He is the MP for Wokingham, first elected in 1987.

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