5 Ways the Pandemic Will Permanently Change the UK Economy
The United Kingdom’s economy will see these 5 changes once the coronavirus pandemic subsides, according to Markets Insider.
Economic crises often signify winds of change, and the coronavirus pandemic is proving to be one such turning point.
Oxford Economics recently conducted a study and determined that there will be fundamental changes to the UK economy after the pandemic.
A permanently bigger state and public borrowing, persistently cowed consumers, a more 'national' UK economy and the impetus for beneficial reforms are all possibilities," wrote lead UK economist Martin Beck in the report.
Oxford Economics published the study on Wednesday. Listed below are the five changes the UK economy will see in the post-covid-19 world.
A Bigger Role for the UK Government in the Economy
The measures implemented to curb the spread of the virus and support the economy have changed the "interventionist approach," the study said. The UK government is expected to further increase public spending to support the welfare program.
Around 9 million workers in the UK were protected under the furlough scheme. These workers could receive 80 percent of their wages up to £2,500 a month. UK citizens will expect government support of other social issues.
More Government Borrowing
In the post-pandemic world, the ratio of government debt-to-GDP will be at the highest level in over 50 years. If the government chooses to decrease this level, higher “populist” taxes on wealth will be implemented to pay down the larger borrowing.
Consumers and investors will be more cautious
The current recession happened extremely fast but is also not expected to last as long as past recessions. However, investors and consumers alike will remain cautious which could lead to slow growth and an interesting economic environment in the years ahead.
A focus on economic self-sufficiency
The UK saw its supply chain crumble as it depended on outsourced Chinese goods during the pandemic. This will spark a change in the UK’s economic outlook, possibly pursuing a “UK-first” approach.
Silver-lining in the economy
The UK could take the difficulties they have faced during the pandemic and use them to inspire change in their economy.