The Sunday Times interviewed Sir Jon Cunliffe, a deputy governor at the Bank of England. The article was in the edition published on 8 November 2020. I have picked out three themes based on specific quotes from Sir Jon.
- red herrings vs real threats
- demographic impact
- collaboration in the virtual world
As landlords, the three themes could be existential threats or opportunities. Given that we cannot drop our property assets on a lorry to move them where there is demand, one person’s problem may be another person’s opportunity.
Red herrings vs real threats
“‘It’s not so much the drop in GDP, but just how the pandemic will restructure the economy,’ said Cunliffe. ‘The [2008-9] crisis was more about the drop in GDP and the impact of a broken financial system, which affected the recovery. But it didn’t lead to the restructuring of the economy in the way this crisis might.’ He stressed the word ‘might’, and the Bank’s latest report shows that it is looking at consumption patterns — less spent on hospitality and travel, more on household goods — and changes to the jobs market, which it does not yet think will be on the scale of the 1980s, when the proportion of employees in factories fell from 26% to 16%.”
“Working from home ‘could increase labour force participation ...and change the regional distribution of the workforce’, said Cunliffe, himself back working in the ‘suburbs’ rather than the Bank’s imposing building.”
“There are opportunities here, but also disadvantages: ‘You lose something over time when you lose the interaction with people. Remote working tends to be very task-focused; a call is about a particular thing. All that peripheral vision, all the things you pick up from just being in the same physical environment, that’s much harder to do.’”