Webinar
9 Apr.

Public health and economic effects

Thursday, 01:00 p.m. | 1 hr

This week’s webinar identified recent COVID-19 developments, with updates on the public health response and impact on the UK and global economy.

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Public health – Dr Jane Halpin, Director, Clinical Lead, Deloitte UK

Dr Jane Halpin discussed the impact of suppression measures across the globe. The curve has begun to flatten in Spain and Italy, suggesting restriction measures are reducing transmission. Low numbers of new cases are now being reported in China, and lockdown measures have been lifted in Wuhan, the original epicentre of the pandemic.

These reports paint an encouraging picture, and countries elsewhere are beginning to think about how they will come out of lockdown in future.

So, what next? From a public health perspective, it’s important to consider three key elements to ensure continued recovery and mitigate subsequent surges in infection. It can be difficult to strike this balance but it is important for countries to understand how they affect each other.

  1. Testing - Both for new cases and for levels of immunity within a population. The easier it is to get rapid testing in place, the more confidence countries can have in reducing future restrictions.
  2. Risk segmentation – Once there is a greater understanding of how transmission occurs, informed decisions can be made about lifting restrictions.
  3. Compliance - There is a risk of complacency and feelings of inequality if some people face longer-term restrictions than others do. This disparity can mean some find it harder to comply and it becomes much more difficult to maintain social distancing. 


The UK and global economy - Ian Stewart, Partner and Chief Economist at Deloitte UK

Ian Stewart noted the impact of recent fiscal measures and examined the outlook for the economic recovery.

The UK government introduced what was described as a “bazooka” of fiscal measures in March, and these are having a clear impact on financial markets, with equities up over the past week. Corporate and sovereign bond markets are also under less stress than they were three weeks ago.

However, the process of providing relief to the economy is ongoing and continues to be fine-tuned to ensure that the fiscal schemes are reaching all pockets of the economy. Most recently the Chancellor, Rishi Sunak, introduced the Coronavirus Large Business Interruption Loan Scheme in order to ensure support reaches more firms.

In terms of the health of the economy, France and Germany are experiencing sharp contractions in activity. According to the Banque de France, French GDP contracted by 6% in the first quarter of 2020, and according to leading German economic research institutes, the German economy is expected to shrink by almost 10% between April and June. A recent Bank of America survey found that as of the end of March, around a third of people in the UK had stopped working as a result of COVID-19, marking a huge reduction in UK employment. Looking at the ups and downs of UK growth since 1900, this year is set to be significantly worse than the year following both the 2008 financial crisis and the 1929 great depression. Our base case forecast is that GDP will contract by 14% in the second quarter, with a bounce back in the following quarters bringing GDP back to pre-COVID-19 levels by the end of 2021. Although this is a significant economic shock, compared with historical UK downturns this would also be the briefest contraction followed by a relatively quick recovery.

Pessimism surrounding the economic recovery grew amongst webinar respondents this week, with 58.3% stating they do not think policymakers have the sufficient tools to cushion the economy from the shock of COVID-19, the highest figure recorded so far. 80% of respondents expected a protracted and severe downturn as a result of the pandemic, and a majority (66.7%) now think the timeframe for a rebound in activity has moved out to Q2 2021 and beyond.

Views on when the UK lockdown measures are likely to end were consistent with the recent communication from the country’s Chief Medical Officer, with most expecting this in May or June.

Speakers

Dr Jane Halpin

Dr Jane Halpin

Director

Jane leads Deloitte’s Clinical Team and is a qualified Public Health Medicine clinician. Prior to joining Deloitte in 2015, Jane had over 25 years’ experience in the NHS including roles as a Medical Director, PCT Chief Executive and NHS England Area Director. Since joining Deloitte, Jane has worked on numerous health care engagements for Trusts, health economies and others, spanning operational improvement, clinical strategy, service reconfiguration and health system integration. Jane has a proven track record in effecting strategic change, driving improvement and developing strong and effective teams, organisations and systems.

Ian Stewart

Ian Stewart

Partner and Chief UK Economist

Ian Stewart is a Partner and Chief Economist at Deloitte where he advises Boards and companies on macroeconomics. Ian devised the Deloitte Survey of Chief Financial Officers and writes a popular weekly economics blog, the Monday Briefing. His previous roles include Chief Economist for Europe at Merrill Lynch, Head of Economics in the Conservative Research Department and Special Adviser to the Secretary of State for Work and Pensions. Ian was educated at the London School of Economics.

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Thursday, 9 Apr 2020 01:00 p.m.
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