This was a year of health crisis. 2021 will be a year of economic crisis. These two events are, of course, not unconnected – by forcing lockdown on millions of people and businesses around the world, the pandemic has slowed growth, decimated workforces, and reshaped entire industries.
In this week’s Tortoise File, we turn our attention to these economic after-effects of Covid-19. By calling the File “Recession 2021”, we aren’t claiming any special knowledge. We are not predicting – as the official definition of a recession would have it – two consecutive quarters of negative growth.
But we are anticipating a recession in the truest sense of the word: a smaller economy not just in size but also in the expansiveness of its horizons. For many people, next year will hold less opportunity and a lot more fear.
This is the merciless nature of economies and the way in which they lag behind events. This year, individuals, companies and even entire countries have taken on new debts to get by – but, next year, many won’t be able to pay their creditors back. The furlough scheme has held unemployment at bay – but that won’t last beyond the scheme’s termination. And unemployment then creates its own vicious cycle – reduced consumption, home repossessions, malaise.
These are difficult thing to quantify, let alone come to terms with. Even in the official forecasts, provided by the likes of the UK’s Office for Budget Responsibility and the Bank of England, there is a great deal of divergence and uncertainty.
After all, who knows? If a vaccine arrives soon, then the best option might be a short and strict period of lockdown now. If a vaccine isn’t forthcoming, then perhaps we all ought to get more used to simply living alongside the virus. One of these implies a sharp but more temporary economic shock; the other would probably be softer but longer lasting.
To account for the uncertainty, this week’s File approaches its subject from various angles – including those of the past and the present. What lessons are contained in previous recessions? And, perhaps more importantly, what lessons aren’t contained in previous recessions, as we deal with our own peculiar situation? What is already happening in the labour market today that will shape people’s employment prospects tomorrow?
In this spirit, the File begins with an episode of the Slow Newscast in which we talk to two men who were at the very centre of the 2008 crisis: Alistair Darling, then the chancellor of the Exchequer, and Mervyn King, then governor of the Bank of England.
In subsequent days, we’ll look at what’s happening in England’s most thoroughly locked-down city, Leicester; how the UK compares to other major economies; the cultural side effects of mass unemployment – and a lot more. We’ll be joined by economists, policy wonks, and, we hope, some artists. You’ll be able to keep track of it all below, with more articles being added to the list as they are published.
And in the end? We want to achieve a more complete picture of what awaits the UK in 2021. Not as a forecast, but as a warning: let us not step complacently into the new year.
Peter Hoskin, editor
Contents
Day One Slow Newscast
Day Two Policy
- Bronwen Maddox on the options facing the Treasury
- Tony Yates on the options facing the Bank of England
Day Three The new economy
- Chris Cook reveals which local areas have been hardest hit
- Torsten Bell explains how the recession is different for different people
Day four Data
- Chris Cook and Chris Newell chart the crisis in a series of data visualisations
- Nimo Omer and Claudia Williams provide a reading list for further study
Day Five Culture
- Matthew d’Ancona looks back at the mass unemployment of the 1980s – and how it left its mark on the culture
- The academics Paul Gregg, Lindsey Macmillan and Emma Tominey explain how recessions never really end for young people
- Pete Paphides selects some of the best songs to come out of recessionary conditions
Credits
Editors: Peter Hoskin, Ceri Thomas
Design: Oliver Bothwell
Images: Jon Jones
