Leading UK economist David Miles gave his take on the economic impact of coronavirus (COVID-19) and Brexit at a virtual event for Business School alumni
Professor David Miles, Professor of Financial Economics at Imperial Business School, explored the different effects of COVID-19 and Brexit on the UK economy at the event entitled 鈥淐OVID-19 and Brexit 鈥 the journey through troubled waters鈥.
Professor Miles, who was a member of the Bank of England鈥檚 Monetary Policy Committee for six years from 2009 in the aftermath of the financial crash, gave a talk and was interviewed by Professor Nelson Phillips in front of Imperial Business School alumni based across the globe.
At the event Professor Miles compared COVID-19, which the UK 鈥渉as in common with pretty much every country in the world鈥 and 鈥渢he more parochial and specific鈥 Brexit phenomenon.
Brexit is聽a significantly less important economic, social and political event than the virus
Professor Miles argued that the economic impact of COVID-19 鈥 at least in the near-term 鈥 was likely to be much greater than that of Brexit, which he said was less predictable.聽
鈥淪ome people see potential upsides of Brexit, but I don鈥檛 think anybody in their right mind sees any particular upsides to聽COVID-19,鈥 he said.
鈥淏rexit 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.鈥
Widespread costs of lockdown
Professor Miles also said the reaction from the UK government to the pandemic had been 鈥渆normous鈥, noting the economic lockdown and the furlough scheme, adding that despite this effort, the response had not been particularly successful.
Professor Miles recently wrote a paper, warning of the 鈥渨idespread costs of lockdown鈥. Published in the National Institute Economic Review, the paper suggests that the losses from continuing severe restrictions in the UK are large relative to the likely gains.
It鈥檚 human welfare on both sides of this balance sheet
鈥淚t鈥檚 not as crude and simple as lives on the one hand and money on the other, it鈥檚 human welfare on both sides of this balance sheet,鈥 he said at the event.
Professor Miles argued the different kinds of costs associated with coronavirus, such as a significant rise in unemployment, and Brexit, such as new barriers to trading goods and services, were so different that there was not a lot of interaction between them.
鈥淭hese聽are additive factors and unlikely to聽interact聽with each other.鈥
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