Coronavirus and the economy
The Briefing Room
BBC
4.8 • 731 Ratings
🗓️ 7 May 2020
⏱️ 28 minutes
🧾️ Download transcript
Summary
What damage are the pandemic and lockdown doing to the economy and what could happen next?
David Aaronovitch explores the economic impact of physical distancing on business, whether our fast expanding national debt is sustainable and the threat posed by declining consumer confidence on our economic recovery.
Does history offer a guide as to how and when people should return to work and government support be turned off?
And what will our economy look like when the lockdown is eased?
Contributors:
Faisal Islam, BBC Economics Editor
Kate Nicholls, chief executive of UKHospitality
Jeffrey Frankel, Professor of Capital Formation and Growth at Harvard University
Professor Jagjit Chadha, Director of The National Institute of Economic and Social Research
Stephanie Flanders, senior executive editor at Bloomberg and head of Bloomberg Economics
Producers: Luke Radcliff, Sally Abrahams and Rosamund Jones. Editor: Jasper Corbett
Transcript
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| 0:00.0 | Welcome to the briefing room with me, David Aronovich. The briefing room is the intellectual panic room, where buffeted by claims and counterclaims you and I can quietly and calmly get to understand a big issue with the help of the top experts on the subject. |
| 0:18.1 | This week, as we slowly ease out of lockdown, what damage has the pandemic done to the |
| 0:23.9 | economy and what sort of recovery can we expect? The government is now paying the wages of about a quarter of workers in the UK. |
| 0:40.3 | Separately, the Department of Work and Pension says it's received 1.8 million new claims for universal credit. |
| 0:46.7 | Virgin Atlantic says it plans to cut more than 3,000 jobs and stop flying from London Gatwick. |
| 0:52.1 | The British engineering company Rolls-Royce could shed up to 8,000 posts. |
| 0:56.4 | The firm described the impact of the crisis engulfing the air industry as unprecedented. |
| 1:01.1 | New car sales collapsed by 97% in April, the lowest monthly figure since 1946. |
| 1:07.5 | It's bad. We knew that. |
| 1:10.1 | But how much better will it get and how quickly? This week, the Bank of England drew up scenarios, anticipating a shrinking of the economy by 14% this year, based on most of the lockdown being eased over the summer. The biggest decline since, well, since before records began. |
| 1:28.9 | After that, the bank scenarios have UK growth rebounding by up to 15% next year. |
| 1:35.4 | So today, I want to understand what that recovery might look like |
| 1:39.1 | and what we can expect from our economy in the long run. |
| 1:43.3 | Step inside the briefing room and together we'll find out. |
| 1:51.3 | At the end of March, the government put large swaves of the economy onto life support. |
| 1:57.4 | So first, let's analyse what the government has done to prop up businesses and citizens. |
| 2:03.2 | Faisal Islam is the BBC's economics editor. |
| 2:06.7 | Faisal, let's start with the basics. |
| 2:08.6 | What support is the government offering to individuals and business? |
| 2:13.5 | Well, there's a whole range of fairly unprecedented support. |
| 2:18.0 | The biggest single support is the coronavirus jobs retention scheme, the furlough scheme. |
| 2:24.1 | That essentially puts into standby mode millions of workers for a period of two to three months, |
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