In a speech, BoE Governor Andrew Bailey noted three component of structural changes in the economies in the future, with legacy of Covid too: “How what we buy has changed and the way we buy it; how the way we work has changed; and how what we make may need to change”
He said, “my best guess is that there will be lasting changes”. Further, there may be a “reversal of the period of low productivity growth”, with Covid as the spur, the change agent. Also, a the change the direction of climate requires investment on a much larger scale.
Nevertheless, Bailey doesn’t see Covid leading to the soft of inter-sectoral change in 80s and 90s. It’s “more likely to be a case of intra-sectoral change”, which ” may also increase the likelihood that more capital can be redeployed, and more rapidly.”
