I think you make a good point about the health consequences of a severe and prolonged downturn in the economy.

The NICE quality-adjusted life year threshold (i.e. the value of one year of life with in good/perfect health) is estimated to be around £30k. So, given that health tends to decline in old age, maybe £2 million for a newborn, and much less for somebody like me in my mid-40s!

The flaw in your estimate in my opinion is that you are using the number of lives lost in an ongoing shutdown scenario to value life, whereas it should be the number of lives saved. There were estimates that more that half a million people would die by August in the do nothing scenario (which I know was based on limited available evidence and isn’t what you’re advocating). That’d mean, if the £500 billion is correct, £1 million per life. There’s also the significant cost savings associated with keeping hospital admissions and stays down.

It’s a problem without a good solution until, fingers crossed, an effective vaccine can be made widely available.

I thought the original estimate was 250k the most of the deaths are elderly 70+ so if we scale your number over 80 years is £25k a year so the statistical hit is (225k x £250k x 90%) + (25k x £1m) so potential cost is c£80bn - so its costs £500bn to save £80bn - no matter how you look at it the maths doesn't add up.

Hey Sal,

Would you care to re-evaluate your forecast that the global hit from coronavirus "will be nothing like the 2007 crash" ?

You will recall that I said this will be far worse and with the effects long term, will make the current economic outlook absolutely desperate.
Many of the people currently furloughed will find their employers shutting the doors when they try to return to work and the idea of a huge "bounce" in the ecconomy, seems to assume that the majority of people will be back at work and desperate to spend - I just dont get it, do you ?

Obviously there’s some uncertainty around the numbers, but from a purely economic POV I suspect you’re right.

The government has to consider second order consequences too. If the NHS is overwhelmed or if civil society frays or even breaks down during a peak, that’d have a big impact. Really difficult judgement call. And politically, a ‘let’s send nan to dignitas’ type of platform would be a hard sell.

Numbers like £500 billion aren’t very relatable, imo. So, for context I looked up the UK’s national debt, which is currently over £1800 billion. £500 billion is about £7k per capita (which sounds fairly affordable with ‘repayments over several years’) or £28k for a family of four (which sounds less affordable to me, even though it is the same thing stated differently).

Bad times.

If anything, I think people still in a job will be desperate to save. The last 15 years have been a pretty volatile period, and a lot of people living it up on the tick will get a massive foghorn-like wake up call during this current crisis.

There's an old saying about the Lebanese - "2 cars on the drive, no food in the fridge". That currently applies to plenty of Brits. There will be a lot of Range Rover Evoques getting handed back over the next few months as people reasses just what's important in their lives. Keep living up to the fantasy of capitalism, or save for the next inevitable rainy day?

One thing for sure is that they cant cut interest rates to stimulate the ecconomy.
The "high street" which already resembling the "marie celeste" is going to be deader than dead.
The only "shops" that were open were coffee bars, nail bars and hair dressers, all of which will be among the last places to be allowed to re open.

It really is fecking grim and that's for the lucky ones.

It is going to be very grim - there is no way of avoiding it. The country will be a very different place by September. The retail landscape will have changed beyond recognition - how many small retailers will return - we will all have got used to shopping on line and I include food in that so businesses will simply go why are we paying big rents huge BR when we change the model and save millions and bring prices down which will be important with so many unemployed. Same will go for offices.

How many Bars/restaurants will re-open etc. We have all got used to using Teams/Blue Jeans/Zoom so travel will be significantly down.

The strategy of lockdown was all wrong - isolate the vulnerable and let the rest of us get on with it - I ask again why is it working in Sweden?

Reasonable numbers? Over 11,000 confirmed cases and over 1,000 deaths for a country with a population of 10 million.

Compare that to their neighbours, Denmark (population 5.6 million) has seen 300 deaths and 6,500 cases, Norway (5.3 million) has seen a death toll of 140 with 6,600 cases, while Finland (5.5 million) has been relatively unscathed with 64 deaths and just 3,000 cases.

But is it working?



From 1 day ago. The total deaths have now exceeded 1000. Read beyond the headlines.

You are correct, things are and will be grim for months to come. You don’t have to be an economist to see that dozens of companies will go bust. The government tax take will drop, plus personal bankruptcies will be widespread. All country’s will however be in the same predicament, obviously we can’t reduce reduce interest rates by much.
We do have one massive advantage over a raft of EU Nations we can and will print money. This has a some major risks, but will definitely solve the problem over the short term. Without wishing to return to the Brexit debate ,being unable to print money due to the euro will devastate Italy and Greece . The loans that Italy and Greece will have to take don’t address the major problems they have. The huge drop in oil prices has probably closed down any sensible debate on Scottish devolution, probably won’t shut up the snp as any shortcomings in Scotland will be blamed on the Westminster parliament.

The population is one 6th of us but they have one twelfth the deaths - which system would you say is working better - we are getting a thousand a day they are getting a hundred?

Their economy whilst damaged will not take as long to recover as ours - so which is the better option?

With the economy in such dire straits I presume the government will request an extension to the transition period rather than dump businesses in to no deal when they have been unable to prepare for it?

Or will they decide that the extra hit to the economy will be worth it for their political purposes and just tell businesses and households that they have to suck up the extra costs and red tape.

Depends to some extent on where they are on their curve. We were doing a lot better than Italy and France in terms of absolute numbers/proportion of population until quite recently.

There may be demographic influences too.

Depends... may be...

Making evidence-based decisions with what is still a pretty sparse body of evidence is really tough.

It's important to remember that other countries, France chief among them, have been including care home deaths in their figures for some time - we haven't - which is why we compare 'favourably' to them, and probably why that has been a comparison the Govt has been keen to use.

If you check out various news channels you can see that a series of meetings are taking place throughout the summer. Obviously by video link,it all seems a bit insignificant compared with the life and death situation some people are in at the moment.