UK families face s 1,200 income after epidemic, Bank of England warns of independence

'To the extent that there is structural change it is important because that’s what can result in scarring – longer term dislocation of pieces of the economy,' Mr Bailey told the Treasury Select Committee.

Bank of England Governor Andrew Bailey told MPs on Wednesday that the UK was causing a permanent ক্ষতি 33 billion loss to the economy as a result of the coronavirus epidemic.

Structural changes in the economy could increase long-term “scars” and create jobs as people respond to the epidemic, Mr Bailey warned.

The bank predicts that behavioral changes such as housework and people going out will cause a 1.5 percent drop in gross domestic product (GDP) each year, below what was expected.

Based on 2019 output, the Covid-19 is worth at least £ 1,200 per family per year more than was predicted before the hit.

Most of the lost output does not match the efficiency. In the post-epidemic world, some sectors, such as retail and hospitality, are more likely to lose jobs than others, while facing a shortage of qualified applicants, which raises unemployment and slows economic growth.

“The extent to which structural change is happening is important, because it can lead to damage – a long-term displacement in a piece of the economy,” Mr Bay told the Treasury Select Committee.

“It could lead to long-term unemployment and a natural increase in the unemployment rate over time.”

Mr Bailey emphasized that the economic outlook was uncertain for at least a quarter of a century.

Dave Ramsden, deputy governor of the Bank of England, said he believed the situation could be worse than forecast.

One reason for this is that there will be a difference between the skills available to the people and the jobs that are available as some areas are severely damaged compared to others, he warned.

“As we look to the next phase of the recovery we will be able to see the magnitude of the impact on the labor market but also the degree to which the UK economy is re-emerging in response to this push.”

A semi-permanent effect can be the reduction in the price of office and shop space due to people working from a distance.

“This commercial real estate will probably see less investment in the near future,” he said.

“Whether this will lead to a less productive or more productive economy is an open question.”

Because online shoppers make purchases online, companies may choose to invest more money in them than in labor, Mr. Ramsden said.

This could mean, for example, the release of shop floor workers to spend money on distribution centers, websites, technology and vehicles.

Over time, this could lead to more productivity, said the bank’s deputy governor.

Mr Bailey said economic forecasting had become difficult because people would continue to take different precautions against the coronavirus and some assumptions could be made about the course of vaccines, treatments and epidemics.

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