London, UK: The corona virus started as a health problem in China but within weeks has triggered a global crisis pushing major economies into recession. The UK’s initial measured response that seemed sensible rapidly gave way to daily briefings by the prime minister and government health advisors with, at times contradictory advice from government ministers and health experts. The public response was somewhat irrational with panic buying of hand sanitiser –understandable given the advice to wash hands frequently – but more bizarrely also toilet rolls.
We are now in the incredible position where most major European countries have closed their borders and almost all flights have been grounded. Not since the war has there been this level of disruption. Businesses complained about the uncertainty caused by Brexit: but it had nothing on the consequences of the corona virus. Economists argued about a percentage or so fall in GDP as the cost of Brexit. Now they talk of falls of 5% and more as a consequence of the virus. And this despite government spending pledges of billions.
Initial talk was of a crisis lasting a few weeks, that’s now moved to a few months but the economic cost will go on for longer than originally estimated. Once bans bans and restrictions imposed, governments and others will be cautious about removing them. Consumer and business confidence will also be slow to recover.
We can expect a long recession and as always there will be recovery but it will take time and only after much damage has been caused. How much damage to this industry is simply impossible to predict.
