Professor David Miles CBE, Professor of Financial Economics, and Professor Nelson Phillips, Associate Dean of External Relations at the Business School, spoke to a global audience of alumni to share their expertise on the prospects for global economic recovery post-COVID-19 and Brexit.
Professor Miles argued that the economic impact of COVID-19 – at least in the near-term – was likely to be much greater than that of Brexit, which he said was less predictable.
"Some people see potential upsides of Brexit, but I don’t think anybody in their right mind sees any particular upsides to COVID-19," he said.
“Brexit is somewhat ambiguous and somewhat negative, but in terms of magnitude it is a significantly less important economic, social and political event than the virus.”
He discussed how the UK government response to the pandemic has been on a scale not seen outside of war time. The political and economic reaction to virus has been enormous. The government’s response to support the work force means approximately 25 per cent of the UK labour force is being paid for by the government. This massive increase in government spending comes at a time when income from taxes is low. “The government deficit is off the scale in terms of what was expected. It is optimistic to presume GDP is down 105 relative to last year, and it looks unlikely to bounce back in 2021.”