The UK is facing resurgence in cases forcing the government to take drastic measures to curb the infection rates. A new set of restrictions and the possibility of another national lockdown threaten to wipe out many sectors particularly the hospitality industry. Macroeconomic influencers share their views on the Covid -19 impact.
John Ashcroft, economics and financial markets expert, shared an article on how the hospitality industry in the UK is on the verge of collapsing. Owners of pubs and restaurants have warned that the new restrictions and a possible national lockdown are putting the industry and millions of jobs at risk.
Owners and operators in the hospitality industry are calling for the implementation of various steps including extension of the current furlough scheme until the end of October, extension of the VAT cut and reduction in beer duty.
The new restrictions are expected to impact the recovery of the UK’s economy and the recent increase in GDP growth may be short-lived, the article noted.
— John Ashcroft (@jkaonline) September 20, 2020
Max Roser, researcher at University Of Oxford, shared an article on the latest restrictions imposed by the UK government. The new restrictions imposed are aimed at curbing the resurgence in infections cases in the country.
These restrictions are focussed more on limiting social and personal interactions, while interactions being made for economic or commercial purposes have been excluded. The strategy was adopted to limit the implementation of a national lockdown and reduce the impact on GDP by allowing commercial activities to continue.
A complete assessment of the new rules, however, indicates that they may do more harm than good by impacting the overall well-being of the people. The article notes that the perceived impact of these restrictions on the society have been ignored, while trying to maximise the GDP.
The UK government’s COVID-19 policies are driven by an ill-founded obsession with maximising GDP — and are opposed to what economics teaches us about how to achieve the best for society.
— Max Roser (@MaxCRoser) September 20, 2020
Daniel Lacalle, chief economist at Tressis SV, shared his views on how gold prices are rising due to increase in money supply. People across the world are aiming to increase the purchasing power of their savings by investing in gold.
Further, central banks are purchasing more gold as they increase money flow and to diversify their own reserves. Prices of gold as well as silver have been rising due to these factors as people try to maximum their savings and escape currency debasement.
Lacalle also expressed his thoughts on the speculations that the US dollar may be losing its status as a global reserve currency. He noted that the US dollar will continue to be the global reserve currency as there is no other alternative. For example, the euro has its own risks of redenomination and the yuan cannot be a global currency as China imposes massive capital controls.
Gold on the Rise as Money Supply Increaseshttps://t.co/ZeD23ABbPx
— Daniel Lacalle (@dlacalle_IA) September 20, 2020
Professor Steve Hanke
Professor Steve Hanke, an economist at Johns Hopkins University, shared a chart on how the US is losing its status as a superpower. A poll conducted by Pew Research Center has revealed that majority of respondents from countries such as Germany, the Netherlands, Italy, Belgium, Australia, and France felt that China is emerging as the biggest economic power.
The US was considered as the biggest economic power by respondents from Japan and South Korea. Hanke noted that the indiscriminate use of sanctions has impacted the soft power held by the US.
Today’s #EconWatch: The #US is losing its status as the world’s preeminent economic #Superpower. America’s indiscriminate & stupid use of financial sanctions is destroying US soft power. #XiJinping’s #Communist #China is surging ahead in the opinion polls. pic.twitter.com/JSVYeT9fWM
— Prof. Steve Hanke (@steve_hanke) September 20, 2020