Five ways the pandemic could alter the economy

• ? Economic crises are often turning points, and the upheaval triggered by coronavirus may prove one of them. A permanently bigger state and public borrowing, persistently cowed consumers, a more ‘national’ UK economy and the impetus for beneficial reforms are all possibilities.
• ? We think the scale of state intervention in the economy to protect public health will increase pressure to do more in aid of other social goals. The austere ‘Treasury view’ of deficits is also likely to wane.
• ? Meanwhile, evidence suggests that major economic shocks can exert a decades-long drag on consumers’ desire to spend, giving another reason why higher government borrowing may persist long after the pandemic has faded.
• ? Supply-chain vulnerabilities exposed by the virus may crystallise the more ‘UK-first’ approach to economic policy that Brexit ushered in. Although greater protectionism could threaten economic dynamism, the crisis could be the stimulus to structural reform, offering a potential growth upside