U.K. Prime Minister Boris Johnson’s government faces a coronavirus dilemma, and how it responds could set the tone of the economy for years to come.
If it withdraws its massive support for jobs and wages too soon, it’ll tip Britain into an unemployment crisis just as other risks, such as Brexit, threaten to clobber growth.
If it extends the aid — as opposition politicians are urging it to do — that could dissuade Britons from quitting jobs that may never return anyway, and hinder a necessary restructuring.
Both options are costly on the face of it. Chancellor of the Exchequer Rishi Sunak’sfurlough programs have cost the treasury almost 35 billion pounds ($46 billion) so far. Mass unemployment or unproductive workplaces could be far more expensive in the longer run though — with political repercussions for Johnson’s Conservatives.
60,963 in IndiaMost new cases today
-1% Change in MSCI World Index of global stocks since Wuhan lockdown, Jan. 23
-1.073 Change in U.S. treasury bond yield since Wuhan lockdown, Jan. 23
4.4% Global GDP Tracker (annualized), June