When this outbreak first began, all the talk was of a sharp but mercifully short economic sting in the tail. The downturn triggered by putting everyday life on hold to halt the infection should, we were told, be V-shaped: a shock, but one from which we’d soon bounce back. Like many comforting predictions in the early days of this pandemic, that is beginning to look alarmingly over-confident.
The first problem with picking up exactly where we left off is that where we left off was already in trouble. Today’s GDP figures, covering the three-month period to February when the coronavirus had started to nibble at the travel and tourism industry but we were weeks away from lockdown, show economic growth virtually flatlining at 0.1% overall and falling in the final four weeks. Far from enjoying some mythical “Boris bounce”, we may have been teetering on the verge of a recession, as business confidence dried up in the face of a potentially hard Brexit. The fear is that the economic aftermath of this crisis, like the virus itself, might be toughest on those with pre-existing conditions - including otherwise thriving western countries choosing this moment in history to shoot themselves in the foot.
The second problem is that, as the World Bank has warned, we may be heading for a global recession – yet, unlike 2008, there is little evidence of countries pulling together to find global solutions. The risk of that V-shaped recession being drawn out into a U, or even the dreaded L – a blow from which we barely recover, bumping along the bottom for years – grows if world leaders retreat into economic nationalism.
So far, growing worries about the economic consequences of the epidemic have translated mainly into calls to end the lockdown quickly. It’s true that the longer Britons are confined to their homes, the more businesses will fail, and the more those lucky enough to have savings will run out of them. The worse things get, meanwhile, the greater the tendency even for those who still feel secure in their jobs to hoard their cash for fear of what lies around the corner. This is the so-called paradox of thrift: that in a recession, people instinctively try to save their money instead of spending it, and thus inadvertently make things worse.
Yet the trouble with calls to ward off economic disaster by risking an early end to the lockdown is that, in a sense, it’s too late for that now. If the country had been shut down right at the start, when there were only a handful of cases in Britain and influential voices were still scoffing that this was just a touch of flu, there may have been public outrage at a perceived over-reaction, but we might now have had the luxury of wondering whether we could afford to ease off.
As it is, there was something almost surreal about a No 10 press conference that saw journalists asking when we might be allowed out again while the death toll was climbing towards 1,000 a day. We are nearing the moment of maximum danger, the moment hospital chiefs hold their breath and even atheists in Whitehall start praying. The blunt truth is that nobody is going anywhere, possibly not for months yet, if we want to keep this infection within hospitals’ capacity to cope. So if we can’t cure what directly ails the British economy any time soon, the only option is to try and improve its underlying condition. That’s what the chancellor, Rishi Sunak, has tried to do with an unprecedented rescue package, effectively taking much of the nation on to the state payroll in an attempt to keep businesses going until something like normality returns.
And if the lockdown lasts into early summer, a similarly big ideological leap of imagination looms over Brexit. For the first time, according to a YouGov poll, a narrow majority of Britons now want to extend the transition beyond December, suggesting the last thing many voters want right now is another economic shock. For now, Boris Johnson’s administration is clinging to the pretence that a complex Brexit deal can still somehow be negotiated in the middle of a national emergency that has put the prime minister in intensive care. But reality surely dictates that the timetable can’t hold.
The crunch time for deciding whether or not to extend the timetable is June, by which time official growth and employment statistics should finally be catching up with the damage now happening under all our noses. If some ministers currently fear a public backlash by admitting Brexit might have to be delayed, by summer the idea of ploughing on regardless may be more likely to trigger a mutiny.
We can’t know yet, of course, whether this life-and-death emergency will make the country more, or less, risk-averse. But perhaps nobody in politics right now should underestimate the longing for life just to go back to normal when this is over: boring, disappointing, inadequate old normal, but which beats watching helplessly as our loved ones suffer and jobs vanish beneath our feet. The great unspoken fear is that by the time this is over, however, even normal will be out of reach.