Reasons to be optimistic but V is still for vigilance

BE IN no doubt: the economic effects of the pandemic have been devastating. To take one recent Government statistic, GDP in May was 24.5 per cent below the level it was in February – a devastating drop.

But there is also cause for a degree of cautious optimism. Yesterday the UK’s National Statistician, Professor Sir Ian Diamond, said he hadn’t observed an uptick in Covid cases since lockdown measures were eased, suggesting that the virus has “flatlined” in the UK.

He also said that a V-shaped recovery – where the economy suffers a sharp but rapid period of decline followed by a strong recovery – remained entirely possible.

Sir Ian’s message follows similarly positive pronouncements from Bank of England economist Andy Haldane, who has said that the recovery in the UK will come “sooner and faster” than expected.

There are still many perils and possible pitfalls. As the furlough scheme winds down from August onwards, there’s a strong risk that many workers will not be re-employed.

And in terms of the virus itself, if we are not careful and don’t continue to follow the rules, it could return and our good work will be undone as we return to square one.

The price of freedom is eternal vigilance and a second spike is possible. But for the moment, we should allow ourselves to tentatively hope for the best.