Coronavirus: how will the government's response affect the economy?
13 March 2020, 19:18
Coronavirus: how will the government's response affect the economy? LBC asks the expert.
Boris Johnson announced yesterday that the UK government has moved in to the "delay" phase of its plan to deal with coronavirus and warned "many more families are going to lose loved ones before their time."
The Prime Minister aims to create a "herd immunity" to coronavirus, meaning that if a wide number of low-risk people get the virus, it will be harder to spread further later down the line. This includes keeping schools open and, for the time being, allowing public gatherings to continue.
Times Economics Editor David Smith said that economists would ideally wish for the general public to contract coronavirus swiftly to ensure the economy goes back to normal - however there are higher priorities than the economy at the moment, such as ensuring the NHS does not buckle, he said.
"When it comes to actions like school closures, that would have a big knock-on effect on business because many many families have two parents working and they will lose staff for that reason," David Smith said.
However the Prime Minister did not propose the closure of schools which he said would help businesses.
Mr Smith also acknowledged that in the case of sporting events, bodies have ignored government advice and postponed matches and similarly most businesses are putting in place procedures to have as many staff working from home as possible.
The economics editor pointed out that businesses who are already teetering on the edge may fold during this period.
"I think the business effect is going to be quite widespread," he said, "I think it's going to be a tough one to get through for a lot of businesses."
Latest advice from the government:
- Self-isolation for seven days if you have a persistent cough or fever
- Even if you only have mild symptoms of Covid-19, you are advised to stay home for at least seven days
- Anyone over 70 is advised against going on cruises and schools have been warned against international school trips
- Public gatherings are not banned but the PM is "considering" doing so for events such as sporting fixtures.
- Schools have also not been suspended, as "scientific advice" has indicated that would do "more harm than good".