This week the press got itself into a frightful state prophesying a lifting of lockdown regulations, partly thanks to ambiguous government messaging. Prompting a display of speedy back-pedaling from Downing Street that would get the average Tour De France contestant drug tested.
Meanwhile back at the economic ranch the Bank of England let slip the prediction that the UK economy could shrink by 14% this year due to the pandemic. Anyone cynical enough to think that mixed messages have been used to partially camouflage awful news, might just be onto something.
Bank of England governor Andrew Bailey said told the BBC on Thursday that the coming downturn would be ‘unprecedented’ and that post lockdown recover would be limited due to consumers being ‘cautious of their own choice’.
He added that they would be unlikely to ‘re-engage fully and so it is really only next Summer that activity comes fully back’.
The picture is truly bleak with two quarters of contraction putting the UK into a technical recession, in the period to June the economy, the bank predicts, will shrink by 25%. For the year as a whole it will shrink by 14%, the biggest decline since the ONS began keeping records in 1949.
The Bank of England predicts the economy could rebound by15% in 2021, but growth won’t be back to pre-virus levels until the middle of the year.
Add to that a housing market at a standstill and a 30% fall in consumer spending and it is clear that the bad times are set to roll and keep on rolling, like a pebble that causes an avalanche.
The received wisdom expounded by Andrew Bailey that any pain will be a short-term blip is comforting; but unrealistic, something he probably knows only too well.
While the graphs and spreadsheets might tell an optimistic story, human experience has something entirely different to say. Consumers aren’t going, as Mr. Bailey puts it, going to be ‘cautious’, many of them are going to be downright petrified. In a few months’ time they might be flat broke too.
The official narrative is that although alarming in the short-term the pandemic is, in historical terms, a bump in the road of little lasting consequence. I don’t buy it; and neither should anyone else.
The speed with which it has swept around the globe throwing everything we understood about life up into the air in the process makes the COVID-19 pandemic one of the fault lines in human history. It is certainly as defining a moment for the twenty-first century as the outbreak of the two world wars was for the twentieth.
How we respond to it will shape our future as a nation and as a human species for decades to come. It is as impossible to imagine to world going back to its default setting in 2021 as it would have been for it to have done so in 1919 or 1946.
Everything has changed and we need a new settlement on a national and international level in recognition of that fact.
Every country needs to have a serious political conversation about how measures such as a universal basic income can be used to create a fairer society and a more sustainable economy. Wellbeing has to be as much a measure of success as a nations GDP.
Painful as the current crisis has been for people around the world it also represents a rare opportunity to change things for the better. One that progressives in all countries must seize with both hands.
If they don’t you can be sure that the promoters of an economic system that made the world we used to know into such a divided place will. What comes about as a result may be the stuff of nightmares.
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