‘Unprecedented’ has felt an overused word since March, but it’s certainly accurate when describing the year we’re experiencing, when we also consider the Australian bush fires and other global disruptions.
It’s hard for economists to make accurate predictions at the best of times, so imagine trying to call the biggest economic disruption of the past 100 years correctly.
Broadly, as with anything, there has been a wide variety of opinions on the issue ranging from apocalyptic to fine and dandy. Most fall within the margins of sensibility and are likely to be seen as the most accurate in the long term.
At a macro level it’s much easier to predict certain movements than it is at the micro level in certain industries, sectors and even business-specifically. That’s also true when making comparisons even with countries within Europe and the EU.
The UK, a large service economy, is vastly different in output and character than, say, the Greek economy, which created a huge amount of output from tourism. As such government interventions are likely to look completely different.
Even when considering the human costs of the pandemic, in health issues and mortality, it has to be considered that British people lead different lives and eat different diets to Greeks, Spaniards and Portuguese and this is likely to have different outcomes.
As we have now reached the 6-month mark in this global pandemic we’re now able to start to draw some better conclusions about the effects that we’ve seen, as well as how things are likely to look.
With much better data now available predictions are now becoming more confident and the outlook is already looking better than many had assumed even a month or so ago.
In a speech for the Bank of England last week, Bank of England economist Andy Haldane said that the UK economy is still on track for a quick, or ‘V-shaped’ recovery, indicating that the base economic factors that the central bank have been studying are looking positive in the medium-term through to the end of the year.
The service economy, whilst currently still in an incubation phase, is beginning to gear up towards re-opening over the summer and is broadly expected to make a strong recovery in areas with high demand.
UK domestic holidays, for example, have seen a dramatic increase in demand since the lifting of lockdown measures in May.
There was good news for property this week too, with UK house prices slipping a measly 0.1% year on year despite a drop in GDP of roughly 20% for the first quarter of the year.
Not just that but prices actually grew in some regions, withThe Express reporting that the “North West was the strongest performer, with annual price growth of 4.8 percent over the past three months, followed by the South West as the next best performing region, which saw 2.3 percent average increases in property values over the last quarter.”
All in all, despite a big disruption, the economy seems well on track for a robust recovery between now and the end of 2021, with property in particular performing very strongly indeed.