How the UK’s economic problems began long before the pandemic

The government’s “build back better” narrative renders the pandemic an opportunity – but ignores the fact that prior to Covid-19, something was already amiss in the world economy.

By Helen Thompson

The London Stock Exchange's FTSE-100 in March 2020. (Photo By Getty)

In all probability, we are entering severe economic times, when many have already had their livelihoods wrecked by the pandemic. As the health emergency abates the deeper the present economic crisis will become, and there is no equivalent of a vaccine to reverse it.

Unfreezing the economy will produce immediate disruption. Governments will soon withdraw the financial support which has paid people’s wages and granted tax and mortgage payment holidays. Even a gradual cessation of these lifelines will expose those sectors such as hospitality and leisure where the pandemic has eviscerated demand or where the debt burden will lead to insolvency. The result will be higher unemployment, especially among the young; in the US, where unemployment rose dramatically in the spring, the increase in youth employment was more than 80 per cent higher than the overall increase.