t takes a small but unpleasant leap of imagination to envisage life in Britain in January 2021 – a mere 10 weeks or so away. The country may well be faced with the twin challenges of Covid-19 and Brexit hitting lives and businesses almost simultaneously. The second wave of cases and accompanying lockdowns could easily peak at around the same time that the Brexit transition period is due to end, on 31 December. Don’t forget that that date is enshrined in law, and still backed by a considerable body of opinion in the Conservative party. Not that the coronavirus knows or cares either way; it will just carry on going about its lethal business.
Even if the Covid-19 crisis isn’t as severe as it was in the first wave in the spring, and even if some sort of Brexit free trade deal is cobbled together, there would be a severe hit to the economy, about the size of what we might have used to think of as an unusually sharp recession, with some long-term loss of investment and national income.
If, however, there is a no-deal Brexit, with added chaos, and the NHS and testing systems cannot cope with the coming surge in cases and hospitalisations, the effect on the economy – jobs and investment – could be more dramatic still in the short term, and longer lasting.
