COVID-19 and Its Implications for the Future
Infamous. That is one of the best words to describe the current global situation. Everyone has now been affected in some way by the pandemic, and we seem to be doing OK.
First, most governments issued a country-wide lockdown to stop the spread of the disease and “flatten the curve” as many campaigned for. This meant that restaurants, shops, and all other business were shut down – except the essentials – and the economy subsequently closed. Without this lockdown, healthcare systems could have collapsed and had major catastrophic effects. Unfortunately, due to the lockdown, countries such as the USA have plunged 30+% in GDP in the last quarter, with the UK nearly following suit at 20.4%.
Currently, we are hoping for the creation of a vaccine which should help get things back on track.
Nonetheless, governments have already began easing lockdown restrictions. Oxford vaccine candidates have noted their vaccine showcases a strong immune response; nonetheless, it was reported by The Guardian that only about 50% of British people would take a vaccine. This can prove troublesome to a swift economic recovery.
Undeniably, the recession should have severe impacts on all markets including the Securities market – as we have seen it multiple times in the past. However, we have seen a sharp rise in the value of numerous stocks, such as Apple, Google and Amazon. Can this technology sector bullish market hold?
The likelihood of it is: Not really.
Despite seeing a rise in the value of these companies, the overall market has crashed severely, lots of companies have gone bust, and there are many people who have been fired and furloughed. The government is doing everything in their power to help with this pandemic. If we access the Bank of England’s website, we can see a full list of measures that explain what is happening in the near-future to tackle COVID-19. To summarise:
Interest rates cut back to 0.1%, meaning we will see much lower costs in loans for businesses and households;
Funding for banks, to allow them to provide these loans at lower interest rates;
Banks will not pay dividends or bonuses to senior staff for the foreseeable future;
Support to large corporations, who have big loans to pay back and might have severe cash flows that could cost thousands of jobs to the economy if they failed.
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Probably, we will see the rise of online business more than ever before, such as videogames and e-businesses; similar to Ready Player One. Also, the fall of businesses such as restaurants, coffee shops and high-street stores – with the inability to pay for rent, labour, and a drop in consumer confidence at the forefront of this collapse. There has been a significant lowering of consumer confidence which is deeply affecting retail, specifically beauty, fashion and electronics industries.
On the other hand, the rise in people wearing face masks whilst out, and the government’s new rules that you must wear them, has made shoppers feel more secure when going out and increased consumer confidence – although the economy has suffered greatly and we still have a relevant number of people that are financially hurt; which is one of the reasons you should subscribe to us! To learn more information about finance and help yourself by remaining well-educated in the matter.
With education, health, supply chains, manufacturing and production, consumer spending, and the direct and indirect costs associated with testing for COVID-19, the treatment, the societal overhaul that we have gone through and many other variants such as long-term issues; it is indubitable that we will be suffering from this pandemic for many years to come.
Besides these evident issues, we will be facing a harsh shapeshifting of globalisation, and everyone should prepare for it. Not only must business leaders prepare for it, but so should each individual. A starting point would be expecting higher import prices, as well as higher costs of travelling and holidays – and as such, being sensible with spending and budgeting your money in a more proper way would lead to a better personal outcome, especially with the obscure, imminent prospect of life.
The future is certainly dim and daunting. In times like this, I do like to refer back to the cataclysmic ideologies of Jordan Peterson, and there is a quote that might motivate you a bit: “If you fulfil your obligations every day you don't need to worry about the future.” And that is the truth! If we do our duty and work collectively, we can fix the present and the future for ourselves and our descendants.