The British epidemic ushered in a “dangerous tipping point”, the economy worsened and fell into recession

Original title: The British epidemic ushered in a “dangerous tipping point” as the economy worsened and fell into recession.

Due to the uncertainty in the current development of the epidemic, Lu Ting, a research associate at the Institute of World Economy and Political Affairs of the Chinese Academy of Social Sciences, believes that the economic cost of this round of lockdown is difficult to predict, but can It will be difficult to see the UK economy recover this year.

Just a few weeks ago, the British government was still urging some citizens who feared contracting the new corona virus to return to office to recover.jobsHowever, the reappearance of the epidemic forced the British government to change its attitude.

On September 22 local time, British Prime Minister Johnson declared in a speech in the House of Commons that Britain has reached a “dangerous tipping point” in the new crown epidemic and must take immediate action to prevent more serious consequences. Johnson has since announced the restart of a series of restrictive measures and revealedThe restrictions can last up to six months.。

The resumption of the lockdown is undoubtedly a severe blow to the British economy, which has just improved after the relaxation of quarantine measures. According to the UKNational Statistical Office(ONS), due to previous epidemic lockdown measures, the UKGDPThe growth rate has fallen by about 20% month-on-month and, following the gradual relaxation of restrictions, the UK GDP growth rate reached 2.4% in May, 8.7% in June and June 6, 6% in July.

In this regard, Lu Ting, a research associate at the Institute of World Economy and Political Affairs of the Chinese Academy of Social Sciences, said in an interview with Times Finance and Economics on September 23, “The ultimate impact of these measures on the British economy will also depend on the development of the British epidemic, government policies andExternal economyCase. “

Lu Ting pointed out that in addition to the internal situation in the United Kingdom, the possibility that British trading partners in Europe will be the first to recover from the epidemic does not rule out the possibility that these countries will achieve economic recovery with the support of fiscal policies. governmental.To exportbusinessBrings a positive sign.

However, due to the current uncertainty in the development of the epidemic, Lu Ting believes that the economic cost of this round of lockdown is still difficult to say, but I fear it will be difficult to see the British economy recover this year.

　　One month later, 50,000 new cases can be added every day

“The number of hospitalizations in England’s regional hospitals has doubled in the past 14 days and the new corona epidemic may spread more rapidly in the winter, so action must be taken,” Johnson stressed when testifying in the House. of the Commons.

According to data from the UK Department of Health on September 22, the cumulative number of confirmed cases in the UK has exceeded 400,000, with 4,926 new cases in the last 24 hours. Among them, the cumulative number of deaths in the UK stands at 41,825, the highest in Europe.

According to the British “Sun” report, British government medical director Whitty and Valence’s chief scientific adviser warned that “if left alone, by mid-October the daily number of new cases in the UK will reach 50,000.”

But at the same time, the British Health Minister Hancock stressed that the new restrictions adopted this time are different from the previous “national blockade”. The government will specifically restrict social activities, but schools and many workplaces will remain open.

In this regard, Lu Ting pointed out that now not only the United Kingdom, but the entire European epidemic has a clear rebound momentum. The implementation of control measures by the government is an inevitable trend, but such control is not a simple blockade or no blockade, but must be based on the development trajectory of the epidemic at any time. Adjusts the range and intensity of the block.

In the new restrictions announced by Johnson on the 22nd, effective September 24 local time, all bars, restaurants and other entertainment venues in the UK must be closed by 10pm; There should be no more than 15 people at the wedding and no more than at the funeral. 30 persons.

It is worth mentioning that the new regulations also reinforce the requirements for the use of masks. Unless table seating is required to eat or drink, including retail store personnel, taxi drivers and passengers, as well as waiters and diners dedicated to indoor hospitality, wearing masks, violators will face a fine of £ 200 for the first offense. Businesses that violate the restrictions will face fines of up to 10,000 pounds, and even the most serious ones will be temporarily ordered to close.

In addition, Johnson also said that if these measures still fail to quell the new crown epidemic, the government will reserve the right to tighten the restrictions. For example, give more support to the police to help implement the new rules and use the military when needed.

In this sense, according to the Financial Times, in British surveysthe companyA YouGov poll of 3,436 British adults today found that 78% of people support Johnson’s new measures, and 45% even think the measures should be stricter, while 32% said the power Government should be Get restricted.

　　3 million peopleunemployment,negativeinterest rateNot preferred by central bank

Since the outbreak, the British government has spent at least 94 billion pounds to rescuejobAnd to provide business loans, and the “job retention” scheme implemented since March also temporarily avoided mass unemployment in the UK.

Under the plan, the British government will pay approximately 8.4 million employees on “passive leave” from March to the end of October this year.salary80%, up to £ 2,500 per month.

But British Chancellor of the Exchequer Sunak has decided not to go ahead with the plan, and the Bank of England predicts that the UKunemployment rateIt may rise to 7.5% by the end of this year, when 3 million people are unemployed.

As for the reasons for not keeping it, Lu Ting believes that the plan’s termination is due to cost and abuse concerns.

By the end of July, the British government’s “job retention” program had spent approximately £ 32 billion in the budget and, according to the Financial Times, up to £ 3.5 billion of taxpayer funds were fraudulent and misused.

On the other hand, Lu Ting pointed out that the job retention program concealed the real employment situation, causing the unemployed to wait blindly to return to work and not cultivate or improve their skills, which was not conducive to employment.marketSpontaneous adjustment. “Even if the job retention program is terminated, the UK government will adopt other programs, such as job retention incentives and youth employment support policies, to support employment.”

As people pin their hopes on the British government, the Bank of England faces increasing pressure. Last week, the Bank of EnglandcoinDiscuss the negatives in the policy statementinterest rateThe news once became the focus of British society.

Bank of England Governor Bailey later came to clarify on September 22, although the refusalinterest rateIt is still in the central bank’s “toolbox,” but the Bank of England has no intention of implementing negative interest rates at the moment. Last week, the Bank of EnglandReference interest rateMaintained at 0.1% and maintained at 745 billion poundsLinkThe scale of the purchase plan remains unchanged.

“negativeInterest rate policyRightBankThe profitability of the system is badly damaged and depends onto depositFinancingBankIt is possible that the scale of loans will be reduced under negative interest rates, which in turn will have a negative impact on the economy, so the effectiveness of the negative interest rate policy remains questionable. At present, the Bank of England has other policy tools that can be used, such as expanding the scale of the bond purchase program, so negative interest rates are not currently the central bank’s first choice. Lu Ting said.

andMorgan stanleyThe Bank of England’s next step is expected to be to scale up its bond purchase program in November. If the UK fails to reach a trade deal with the European Union, the Bank of England can implement negative interest rates.

But to date, the UK-EU trade deal has shown no signs of breaking out of stalemate.

according tofinancial worldThe Daily reported that Simpson, a professor at the London School of Economics, said that in the long term, the economic cost of a “hard Brexit” in the absence of a comprehensive trade deal will be two to three times greater than the impact of the new crisis. of the corona virus.

“A no-deal Brexit will have a huge negative impact on both Britain and Europe. Both will face chaos in the trade order and a substantial rise in trade costs, which will worsen the economy and slide into recession.” Therefore, Lu Ting believes that, despite many problems, In the current economic situation, the two sides should hope to avoid a no-deal situation as much as possible.

(Article source: Times Finance)

(Responsible editor: DF526)