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US and UK are likely to resume pre-Covid growth




But that’s not the end of the problem. The unemployment rate in the United States has risen far more than in the United Kingdom, hitting a high of around 15%. It runs at 6.3pc compared to the current UK level of 5pc. The unemployment rate in the U.S. is already falling, while the unemployment rate in the U.K. will continue to rise until early 2022, reaching around 6%.

The difference in the unemployment experience is striking, given that there has been less decline in production in the United States. The explanation is that Americans supported the economy primarily through cash handouts rather than something like our baggy plans that retained both employees and businesses. This means that for the same percentage reduction in yield, the degree of scarring here should be smaller.

In fact, corporate investment in the United States has declined during the pandemic than in the United Kingdom and is already rebounding. However, the bigger weakness in the UK may have to do with Brexit rather than Covid. With Brexit now over and dusting, and the worst fears of it diminishing, there is a good prospect in the UK that a rapid recovery in demand will see a significant rebound in business investments with the help of recent tax measures.

Perhaps minimizing the scarring effect in the United States will be helped by the rapid recovery rate from the pandemic. The U.S. will return to pre-Coronad levels within a few months from now compared to the UK’s first quarter of 2022. But I can’t believe the difference between these months is very large.

I was more impressed with the debate about Covid’s long-term consequences, including the radical structural changes affecting office life, how people shop, how they commute, where people want to live, and consequently the shape of the city. . These changes require flexible adaptation by both the public and private sectors. Traditionally, both American employers and workers did much better than the British.

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