How bad will recession be and what will recovery look like?

This is Money Podcast

This is Money

Business News, Business, Investing, News

4.1 • 650 Ratings

🗓️ 19 April 2020

⏱️ 47 minutes

🔗️ Recording | iTunes | RSS

🧾️ Download transcript

Summary

The economic destruction of the coronavirus crash was laid bare in reports from the Office of Budget Responsibility and IMF this week.

Lockdown has already wiped £50billion off the UK economy and is costing the nation £2billion a day, said the OBR.

Meanwhile, the IMF warned the global economy would take the biggest hit since the Great Depression in the 1930s, with advanced economies shrinking 6.1% this year and developing countries by 1%.

But although the OBR forecast an astonishing 35% slump in UK output in the second quarter of this year - with a three-month lockdown - the other side of its chart showed a substantial bounce-back.

What will we need to do for that recovery to happen – and what will it look like?

On this week’s podcast, Simon Lambert and Georgie Frost look at the reports on the economic impact of Covid-19 and at the potential bounce back, along with which sectors and businesses could seize the day when it comes.

They also discuss the big tech firms that have benefitted from lockdowns and working from home around the world.

The lofty valuations of these companies marked the top of the previous stock market boom, but their shares have fared better than most in the coronavirus crash. Can the FAANG stocks (and Tesla) pick up where they left off?

And finally, investors are told to think long-term with the minimum investment period traditionally cited as five years. But have the events of the past 21 years on the stock market shown that now we need to think in decades instead?

Transcript

Click on a timestamp to play from that location

0:00.0	Welcome to This Is Money. I'm Georgie Frost and alongside me today is editor Simon Lambert.
0:05.4	Now, last week we decided to offer you a little ray of sunshine in these darkened times with a more upbeat pod that was covering the good news stories out there.
0:15.6	But I'm afraid today the dark clouds have gathered again and we're crashing back down to earth.
0:21.0	This week we've been warned of more tough times to come that the economy could shrink, 35%, 2 million people out of work and the world faces a massive rise in debt.
0:30.6	So when it comes to lockdown, all the hawks or the doves prevail.
0:35.0	With our kids facing an uncertain financial future, should some of the burden
0:38.8	of now's debt fall on the elderly with the scrapping of the triple lock. We look at the problems
0:44.3	facing the retail sector, whether the good news for tech stocks will last and why small investors
0:49.0	shouldn't be scared off. But we do have a lesson for you. Don't forget you step to date.
0:53.2	With all the latest breaking
0:54.2	money news, just go to this ismoney.com.uk or download the app. There is no way to sugarcoat
1:01.3	the economic bad news that's been coming out. The Treasury, the OBR and the IMF this week. The
1:05.6	Chancellor of Warning of Hard Times ahead, which let's be honest, we sort of guessed would be the case. But then we got
1:12.4	the OBR figures of 35% that the economy could shrink by and 2 million potentially losing their
1:20.4	jobs. Meanwhile, the IMF says countries around the world, including the UK, are facing a massive
1:26.1	rise in debt due to the COVID-19 outbreak.
1:30.0	So Simon, welcome. Give us a bit more context around these, will you?
1:34.2	The context is that we're now starting to discover some of the economic bad news that's
1:40.7	going to filter through from everybody pushing the pause button. If you take a consumer economy, which is what the UK has and what most of the rest of the
1:48.7	Western world has, and you suddenly stop pretty much everything until everybody to stay at home
1:56.3	and effectively not go out and do a lot of that consuming that they would normally do,
2:02.1	and you primarily replace the sort of casual consumption that you normally have
	...

Please login to see the full transcript.

Previous episode | Next episode

Disclaimer: The podcast and artwork embedded on this page are from This is Money, and are the property of its owner and not affiliated with or endorsed by Tapesearch.

Generated transcripts are the property of This is Money and are distributed freely under the Fair Use doctrine. Transcripts generated by Tapesearch are not guaranteed to be accurate.