Investment and Unemployment

Andrew Smithers
London, 27th July 2020


The future is unknown, but we should not count on being improbably lucky. Covid-19 has increased the need for a large increase in business tangible investment. This was necessary before the pandemic and has because essential to prevent a large rise in unemployment. Both Covid-19 and Brexit will lower the value of the UKs stock of capital. We are seeing large changes in spending patterns, some of which are likely to be permanent. Those who supply goods and services whose demand has declined will produce less and the value of their invested capital will fall. Both the pandemic and Brexit will lead to changes in supply chains, which will lower the output and value of existing capital.

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Investment and Unemployment
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