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The economy remains on life support, but its pulse is still beating – latest real time indicators of the Scottish economy

The fight against the coronavirus is continuing to take its toll on economic activity in Scotland. Official data capturing the direct impact of the pandemic on the Scottish economy is beginning to be released (see our article from earlier this week on labour market and Universal Credit data), but at the moment it only covers the first few weeks of the lockdown. In this week’s article we continue to look at some regular and new indicators on business activity/sentiment, the labour market, consumer demand, and prices to provide us with an indication of where we might be heading.

With the First Minister’s announcement yesterday about the easing in lockdown restrictions, there may be changes afoot but these won’t be captured in these statistics given the timing of her statement. However, there may have been some spillover from the Prime Minister’s announcements relating to England on the 10^th May and a sense that change was on its way. By all accounts, conditions clearly remain challenging, and will no doubt continue to be so even as we move into the next ‘restart’ phase.

Returning to work – the unintended consequences of easing the lockdown

Attention is now turning to how to start to ease restrictions on lockdown to enable the reopening of more parts of our economy. As we have pointed out in a previous article, the economy can’t simply be turned off and on again and any restarting must not jeopardise public health. It is also important to recognise that for many workers and business owners there will be legitimate anxiety about returning to work.

In this article, we look at some of the barriers that may prevent individuals from returning to physical workplaces. For those who can continue to work from home, it is likely that they will be asked to do so for the foreseeable future. But this is simply not feasible for all.

There are three key issues that will affect whether people feel they can return to work and do so without jeopardising their own or other people’s health and wellbeing: ability to leave the home, being able to travel safely to work, and safety once at work.

The new normal…..won’t be normal

In an earlier article, we discussed the fallout from the current crisis and argued that it will take time to ‘return to normal’.

But the scale and nature of the shock means that this ‘new normal’ might look quite different in a number of ways.

In the months to come, we’ll be looking at how different aspects of our economy could be impacted by recent events. This blog provides a brief overview of some of the areas that we will explore.

It’s time to talk about Basic Income. But first we need to work out why we want it.

Over the last month or so the, in the face of a health emergency, the economy has been all but shutdown so as to minimise the fatal impact of the Coronavirus pandemic. In its place, the government has stepped in to try to prop up household incomes, both here in the UK and across the world.

Out of this crisis, there is likely to be a reappraising of how we provide certainty to those whose financial security is put at risk due to factors outwith their control. The Coronavirus is only one of the issues that have been affecting the financial security of many households in recent years. It is perhaps to our shame that it has taken a major pandemic, and for financial uncertainty to envelop a larger share of the population, to shift the prevailing view about what is an appropriate level of income for the state to provide.

Of course, a government’s resources are not infinite, and the voices clamouring to ‘balance the books’ will no doubt get louder as time goes on. But – as we discussed in our podcast with Harry Burns last week – there are emerging questions over what will be the ‘new-normal’ and whether a change in the social contract between individuals, business and the government is needed.

A question of risk

One of the striking things about this crisis is that, in many ways, we have known it has been coming.

Pandemics have been a constant feature of global risk registers for a generation. Indeed, infectious diseases have featured regularly in the World Economic Forum’s annual Global Risks Report. The UK Government has also recognised the threat in each in every one of their own civil contingency risks.Continue reading