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After the Downturn, What Will the Recovery Look Like?

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Britain’s economy will recover quite rapidly from the downturn caused by the coronavirus lockdown, according to investment expert Kevin Gardiner.

Kevin was speaking in the latest Wales Business Review podcast on Business News Wales, hosted by former First Minister Carwyn Jones.

Kevin is a global investment strategist with Rothschild Wealth Management, and member of the Cardiff Capital Region’s Economic Growth Partnership.

Speaking before the Welsh and UK governments had announced the relaxation of some lockdown measures, Kevin said:

“The instant that the lockdowns begin to be eased, then we can start to go back about business in the way that we used to.

“It will take a while to get back to where we started. Maybe it will take a year, that seems to be the Bank of England’s guess, but I think we’ll be moving in that direction pretty soon in the weeks and months ahead.

“Because one of the many things that is unusual about this downturn, [is] it’s the first ever deliberate downturn. We’ve engineered this to tackle the virus, so when we decide to relax the lockdown, things will start to recover.”

Kevin said he didn’t share the view that in the new normal everything would be very different to the way it was before.

“I think the industries that have been hit hardest in the short term will bounce back most,” he said.

“There will be some trends that will be reinforced, there will be other trends that will maybe fade away. The trend towards online working, towards a larger service sector in the economy relative to manufacturing. We’re slowly going through the end of the oil age. I expect all these things to carry on going forwards.”

He added:

“In particular I don’t buy the idea that we’re going to stop doing business internationally; and that people won’t travel, and eat out, and go to cultural events any more. I don’t think that’s the case at all.

“I think the recovery that we’re all looking forward to, it can start soon, it can be pretty potent, and I think it will look very similar to the economy that we came out of.”

Asked by Carwyn Jones if he thought people would baulk at going back to the levels of pollution they were used to before the lockdown,

Kevin said:

“Yes I think they will, and that’s good, but to a certain extent that’s a trend that I hope was already established to begin with. We had the Wellbeing of Future Generations Act several years ago. Society generally is increasingly taking the environment much more seriously than it was. So I think at the margin that will change, and that’s a good thing.”

Also taking part in the Wales Business Review was Ashley Rogers, commercial director of North Wales and Mersey Dee Business Council. Ashley agreed that the experience of the lockdown had increased many people’s appreciation of the natural environment.

“People can here the bird song. I went for a walk yesterday; I’m right by the hills here in Prestatyn and it was deafening almost. I think Kevin’s right, people are seeing nature, as it were, with some of the veil lifted from the pollution and noise, [and] the environment is almost getting a bit of a kickstart,” he said.

“What will happen is we’ll see, as Kevin said, what was already an initial movement around low carbon travel, [and] managing numbers in certain tourism areas; that will accelerate, because people will be less inclined to think, let’s go back to how it was before. It’s a catalyst for a change that was already in the background, but I think it will accelerate.”

The Wales Business Review with Carwyn Jones is available to watch on Business News Wales